A company is considering replacing an old piece of machinery, which cost $597,400 and has $349,000 of accumulated depreciation to date, with a new machine that has a purchase price of $483,100. The old machine could be sold for $64,500. The annual variable production costs associated with the old machine are estimated to be $157,900 per year for eight years. The annual variable production costs for the new machine are estimated to be $102,300 per year for eight years. Question Content Area a. Prepare a differential analysis dated April 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential AnalysisContinue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2)April 29 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative 2) Revenues: Proceeds from sale of old machine $fill in the blank 8dc63ef73069055_1 $fill in the blank 8dc63ef73069055_2 $fill in the blank 8dc63ef73069055_3 Costs: Purchase price fill in the blank 8dc63ef73069055_4 fill in the blank 8dc63ef73069055_5 fill in the blank 8dc63ef73069055_6 Variable productions costs (8 years) fill in the blank 8dc63ef73069055_7 fill in the blank 8dc63ef73069055_8 fill in the blank 8dc63ef73069055_9 Income (Loss) $fill in the blank 8dc63ef73069055_10 $fill in the blank 8dc63ef73069055_11 $fill in the blank 8dc63ef73069055_12

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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a. Prepare a differential analysis dated April 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential AnalysisContinue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2)April 29

	Continue with Old Machine (Alternative 1)	Replace Old Machine (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues:
Proceeds from sale of old machine	$fill in the blank 8dc63ef73069055_1	$fill in the blank 8dc63ef73069055_2	$fill in the blank 8dc63ef73069055_3
Costs:
Purchase price	fill in the blank 8dc63ef73069055_4	fill in the blank 8dc63ef73069055_5	fill in the blank 8dc63ef73069055_6
Variable productions costs (8 years)	fill in the blank 8dc63ef73069055_7	fill in the blank 8dc63ef73069055_8	fill in the blank 8dc63ef73069055_9
Income (Loss)	$fill in the blank 8dc63ef73069055_10	$fill in the blank 8dc63ef73069055_11	$fill in the blank 8dc63ef73069055_12

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