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MrRa [10]
3 years ago
6

CraftMaster Corporation purchased a machine 7 years ago for $339,000 when it launched product X05K. Unfortunately, this machine

has broken down and cannot be repaired. The machine could be replaced by a new model 360 machine costing $353,000 or by a new model 280 machine costing $332,000. Management has decided to buy the model 280 machine. It has less capacity than the model 360 machine, but its capacity is sufficient to continue making product X05K. Management also considered, but rejected, the alternative of dropping product X05K and not replacing the old machine. If that were done, the $332,000 invested in the new machine could instead have been invested in a project that would have returned a total of $426,000. In making the decision to buy the model 280 machine rather than the model 360 machine, the differential cost was:
Business
1 answer:
allochka39001 [22]3 years ago
3 0

Answer:

Model 280 is $21000 cheaper.

Explanation:

Giving the following information:

CraftMaster Corporation purchased a machine 7 years ago for $339,000 when it launched product X05K. Unfortunately, this machine has broken down and cannot be repaired.

The machine could be replaced by a new model 360 machine costing $353,000 or by a new model 280 machine costing $332,000.

We don't have any information regarding variable costs, fixed costs, useful life, etc.

The only differential cost provided is the purchase price.

Differential cost= model 360 - model 280= 353000-332000= $21000

Model 280 is $21000 cheaper.

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5 0
1 year ago
Regarding competitive strategies, companies seek efficient manufacturing and productive employees to achieve ___________.
hoa [83]

Answer:

D. differentiation.

Explanation:

Option A - Low-cost leadership refers to the strategy in which the customers are getting the products at a low cost. Companies seek to achieve cost leadership, but with efficient manufacturing and productive employees cannot help them to achieve that.

Options B and C - With local employees, it is challenging to achieve global operation, and focused differentiation is the selling of unique products to the customers. So, those are wrong answers.

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3 years ago
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3 years ago
Wen Co. purchased a building for $200,000. Wen paid $20,000 in lawyer and title fees. Wen also paid an additional $15,000 to mod
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Answer:

$235,000

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A company can capitalize the cost of assets, delivery cost, legal & documentation charge and any other directly attributable cost that is incurred to bring the asset in the condition as intended by management.

Therefore, cost of asset, title fee and building modification fee shall be added in the cost of asset as follows:

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Building Accommodation        <u>   15,000</u>

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6 0
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