1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
slega [8]
3 years ago
11

A machine with a book value of $80,000 has an estimated five-year life. A proposal is offered to sell the old machine for $50,50

0 and replace it with a new machine at a cost of $75,000. The new machine has a five-year life with no residual value. The new machine would reduce annual direct labor costs from $11,200 to $7,400. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)
Business
1 answer:
34kurt3 years ago
6 0

Answer:

Company should continue with old machine (Alternative 1)

Explanation:

Preparation of a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)

DIFFERENTIAL ANALYSIS

Continue with old machine(Alternative 1) ; Replace with old machine(Alternative 2); Differential effect on income

REVENUES

Proceeds from sale of machine

$0 $50500 $50500

COSTS

Purchase price $0 -$75000 -$75000

Direct labor -$56000 -$37000 19000

(11200*5 = -56000)

(7400*5 = -37000)

Income (loss) -$56000 -$61500 -$5500

Based on the above differential analysis the Company should continue with OLD MACHINE (Alternative 1)

You might be interested in
Cost of Goods Sold and Income Statement Schuch Company presents you with the following account balances taken from its December
mario62 [17]

Answer:

Schuch Company

a) Schedule of Cost of Goods Sold

Inventory, January 1                      $40,000

Purchases                                       110,000

Purchases returns                           -3,500  

Freight-in                                           5,000

Cost of goods available for sale $151,500

less Inventory, December 31         22,500

Cost of goods sold                     $129,000

b) Multi-step Income Statement

For the year ended December 31, 2013:

Net Sales Revenue                    $278,000

Cost of Goods Sold                      129,000

Gross profit                                $149,000

Expenses:

Selling expenses          35,000

General & admin exp.  22,000    57,000

Operating profit                         $92,000

Interest expense                            4,000

Income after interest expense $88,000

Gain on sale of property (pretax)  7,000

Comprehensive income before tax $95,000

Income Tax (30%)                                28,500

Net income                                       $66,500

EPS = $2.66

c) Single-step Income Statement

For the year ended December 31, 2013:

Net Sales Revenue                    $278,000

Gain on sale of property (pretax)    7,000

Total revenue and gains          $285,000

Cost of Goods Sold     129,000

Selling expenses          35,000

General & admin exp.  22,000

Interest expense            4,000

Total expenses                         $190,000

Income before taxes                 $95,000

Income Taxes (30%)                    28,500

Net income                                $66,500

EPS = $2.66

Explanation:

a) Data and Calculations:

December 31 adjusted trial balance:

Inventory, January 1 $40,000

Purchases returns $3,500

Selling expenses 35,000

Interest expense 4,000

Purchases 110,000

Sales discounts taken 2,000

Sales 280,000

Gain on sale of property (pretax) 7,000

General and administrative expenses 22,000

Freight-in 5,000

Additional data:

Ending Inventory $22,500

Common Stock outstanding = 25,000

Income tax rate = 30%

Sales                       $ 280,000

Sales discounts taken   2,000

Net Sales Revenue $278,000

6 0
3 years ago
Ann is in the middle of completing her first 1040EZ tax form. She has some questions about an instruction on the form. What shou
Len [333]
Look at the instructions for that form 1040EZ online. If that doesn't help you call the dept of taxation for help
7 0
3 years ago
True/False
lorasvet [3.4K]

Answer:

False

Explanation:

Internal search is when a consumer search for the alternatives from the prior knowledge or memory about the category of service or the product.

Internal search is usually done when the low involvements are to be considered.

External search is when a  consumer search for the alternatives from the friends or specialized sources like reports or available analytics or from the

These are done when there is high involvement of capital or resources

hence,

Advertising creates an impact in a way that it stores some visual or impression of the product in the mind of consumer i.e an impression while making choices in internal search

6 0
3 years ago
Karen doesn’t like driving to the local bank branch, but doesn’t think that it is secure to do financial transactions on her pho
timofeeve [1]
It would probably be best to choose online banking and only use her local bank when necessary.
8 0
3 years ago
Read 2 more answers
Which value gap refers to a company’s failure to accurately assess what customers really want?
fiasKO [112]

Answer:

The correct answer is: Service Quality Gap.

Explanation:

The Service Quality Gap refers to the difference between what a company understands a customer's desires and what must be really done to satisfy that consumer. Firms should make all the efforts in their hands to close that breach and provide the customer with the good or service they need to keep their businesses going. When the gap is not closed, the customer's loyalty fails, pushing them to look for different options in other organizations.

5 0
3 years ago
Other questions:
  • Dove wanted to do more than just sell its beauty care products. The company was on a quest to discover "real beauty" and help wo
    7·1 answer
  • In an election poll, 200 people were surveyed and 45% expressed their likelihood to vote for a particular candidate. the margin
    11·1 answer
  • The baker combined all of the dry ingredients into a mixing bowl. he slowly added the wet ingredients, stirring consistently as
    12·1 answer
  • You have been working as an intern for your father's construction company and have been asked to sit in the on the company revis
    6·1 answer
  • The difference between a secured loan and unsecured loan is that the secured loan is
    8·2 answers
  • The 3G Co. has $2,000,000 of assets, and its tax rate is 40%. Its basic earnings power ratio is 16%,and its ROA is 8%. What is i
    9·1 answer
  • Sharon knew that her established customers liked her product much better than the competitors. She was planning to expand into n
    9·2 answers
  • Grace is a self-employed artist. She can make 20 pieces of pottery per week. She is considering hiring her sister Kate to work f
    10·1 answer
  • Which factors can affect a stock's price? Check all that apply.
    9·2 answers
  • QUESTION 5
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!