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Katarina [22]
3 years ago
14

Elmdale Company has a machine that affixes labels to bottles. The machine has a book value of $80,000 and a remaining useful lif

e of 3 years and no salvage value. A new, more efficient machine is available at a cost of $300,000 that will have a 5-year useful life with no salvage value. The new machine will lower annual variable production costs from $520,000 to $410,000.
Required:
Prepare an analysis showing whether the old machine should be retained or replaced.
Business
1 answer:
sattari [20]3 years ago
7 0

Answer and Explanation:

The preparation of the analysis is shown below:

Particulars  Retained equipment Replace equipment Net income change

Variable cost  $1,560,000                  $1,230,000                $330,000

             ($520,000 × 3 years)      ($410,000 × 3 years)

New machine cost                             $300,000                -$300,000

Net change                                                                   $30,000

So based on the analysis the old machine should be replaced

Therefore we considered all the information given in the question

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3 years ago
McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2. Product A sells for $75; Z sells for $95. Varia
torisob [31]

Answer:

1,350 units

Explanation:

The computation of the break-even point in composite units is shown below;

Composition contribution margin per unit is

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Now break-even point in composite units is

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= 1,350 units

8 0
3 years ago
The level of analysis to use when identifying user goals is the _______.​ a. ​ elementary activity level b. ​ temporal event lev
Aliun [14]

Answer:

elementary business process level

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3 0
3 years ago
Leesburg sold a machine for $2,200 on november 10th of the current year. the machine was purchased for $2,600. leesburg had take
taurus [48]
The original price of the machine is $2,600 but it has a depreciation value now of $1,200.

*original price - depreciation value = machine's existing value*
$2,600 - $1,200 = $1,400

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3 years ago
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Answer: both I and II are TRUE

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7 0
3 years ago
Read 2 more answers
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