A company uses a machine to manufacture its product. The operating results of the company for a quarter follows: Sales $2,000,000 Cost of sales 500,000 300,000 Operating expenses excluding depreciation Depreciation of machine 260,000 1,060,000 Net income $940,000 The present operation can continue or the machine can be used to produce a new product that could produce P2,200,000 revenue per quarter. The cost to manufacture the new product plus operating expenses, exclusive of depreciation will be P800,000. Which alternative is better? Support your answer with computation.

A company uses a machine to manufacture its product. The operating results of the company for a quarter follows: Sales $2,000,000 Cost of sales 500,000 300,000 Operating expenses excluding depreciation Depreciation of machine 260,000 1,060,000 Net income $940,000 The present operation can continue or the machine can be used to produce a new product that could produce P2,200,000 revenue per quarter. The cost to manufacture the new product plus operating expenses, exclusive of depreciation will be P800,000. Which alternative is better? Support your answer with computation.

Name: A company uses a machine to manufacture its product. The operating re
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Description: A company uses a machine to manufacture its product. The operating results of the company for a quarter follows:Sales$2,000,000Cost of sales500,000Operating expenses excluding depreciation300,000Depreciation of machine260,0001,060,000Net income$940,

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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Subject :- Accounting
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