Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $54,200, the accumulated depreciation is $21,700, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $112,700. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: Present Operations Proposed Operations Sales $171,800 $171,800 Direct materials $58,500 $58,500 Direct labor 40,700 — Power and maintenance 3,800 20,100 Taxes, insurance, etc. 1,400 4,500 Selling and administrative expenses 40,700 40,700 Total expenses $145,100 $123,800 Question Content Area a. Prepare a differential analysis dated May 4 to determine whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Prepare the analysis over the useful life of the new machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential AnalysisContinue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2)May 4 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effects (Alternative 2) Revenues: Sales (5 years) $fill in the blank f09d83f85f89019_1 $fill in the blank f09d83f85f89019_2 $fill in the blank f09d83f85f89019_3 Costs: Purchase price fill in the blank f09d83f85f89019_4 fill in the blank f09d83f85f89019_5 fill in the blank f09d83f85f89019_6 Direct materials (5 years) fill in the blank f09d83f85f89019_7 fill in the blank f09d83f85f89019_8 fill in the blank f09d83f85f89019_9 Direct labor (5 years) fill in the blank f09d83f85f89019_10 fill in the blank f09d83f85f89019_11 fill in the blank f09d83f85f89019_12 Power and maintenance (5 years) fill in the blank f09d83f85f89019_13 fill in the blank f09d83f85f89019_14 fill in the blank f09d83f85f89019_15 Taxes, insurance, etc. (5 years) fill in the blank f09d83f85f89019_16 fill in the blank f09d83f85f89019_17 fill in the blank f09d83f85f89019_18 Selling and admin. expenses (5 years) fill in the blank f09d83f85f89019_19 fill in the blank f09d83f85f89019_20 fill in the blank f09d83f85f89019_21 Profit (Loss) $fill in the blank f09d83f85f89019_22 $fill in the blank f09d83f85f89019_23 $fill in the blank f09d83f85f89019_24

Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $54,200, the accumulated depreciation is $21,700, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $112,700. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: Present Operations Proposed Operations Sales $171,800 $171,800 Direct materials $58,500 $58,500 Direct labor 40,700 — Power and maintenance 3,800 20,100 Taxes, insurance, etc. 1,400 4,500 Selling and administrative expenses 40,700 40,700 Total expenses $145,100 $123,800 Question Content Area a. Prepare a differential analysis dated May 4 to determine whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Prepare the analysis over the useful life of the new machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential AnalysisContinue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2)May 4 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effects (Alternative 2) Revenues: Sales (5 years) $fill in the blank f09d83f85f89019_1 $fill in the blank f09d83f85f89019_2 $fill in the blank f09d83f85f89019_3 Costs: Purchase price fill in the blank f09d83f85f89019_4 fill in the blank f09d83f85f89019_5 fill in the blank f09d83f85f89019_6 Direct materials (5 years) fill in the blank f09d83f85f89019_7 fill in the blank f09d83f85f89019_8 fill in the blank f09d83f85f89019_9 Direct labor (5 years) fill in the blank f09d83f85f89019_10 fill in the blank f09d83f85f89019_11 fill in the blank f09d83f85f89019_12 Power and maintenance (5 years) fill in the blank f09d83f85f89019_13 fill in the blank f09d83f85f89019_14 fill in the blank f09d83f85f89019_15 Taxes, insurance, etc. (5 years) fill in the blank f09d83f85f89019_16 fill in the blank f09d83f85f89019_17 fill in the blank f09d83f85f89019_18 Selling and admin. expenses (5 years) fill in the blank f09d83f85f89019_19 fill in the blank f09d83f85f89019_20 fill in the blank f09d83f85f89019_21 Profit (Loss) $fill in the blank f09d83f85f89019_22 $fill in the blank f09d83f85f89019_23 $fill in the blank f09d83f85f89019_24

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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Question Content Area

a. Prepare a differential analysis dated May 4 to determine whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Prepare the analysis over the useful life of the new machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.

Differential AnalysisContinue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2)May 4

	Continue with Old Machine (Alternative 1)	Replace Old Machine (Alternative 2)	Differential Effects (Alternative 2)
Revenues:
Sales (5 years)	$fill in the blank f09d83f85f89019_1	$fill in the blank f09d83f85f89019_2	$fill in the blank f09d83f85f89019_3
Costs:
Purchase price	fill in the blank f09d83f85f89019_4	fill in the blank f09d83f85f89019_5	fill in the blank f09d83f85f89019_6
Direct materials (5 years)	fill in the blank f09d83f85f89019_7	fill in the blank f09d83f85f89019_8	fill in the blank f09d83f85f89019_9
Direct labor (5 years)	fill in the blank f09d83f85f89019_10	fill in the blank f09d83f85f89019_11	fill in the blank f09d83f85f89019_12
Power and maintenance (5 years)	fill in the blank f09d83f85f89019_13	fill in the blank f09d83f85f89019_14	fill in the blank f09d83f85f89019_15
Taxes, insurance, etc. (5 years)	fill in the blank f09d83f85f89019_16	fill in the blank f09d83f85f89019_17	fill in the blank f09d83f85f89019_18
Selling and admin. expenses (5 years)	fill in the blank f09d83f85f89019_19	fill in the blank f09d83f85f89019_20	fill in the blank f09d83f85f89019_21
Profit (Loss)	$fill in the blank f09d83f85f89019_22	$fill in the blank f09d83f85f89019_23	$fill in the blank f09d83f85f89019_24

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	Present Operations	Proposed Operations
Sales	$171,800	$171,800
Direct materials	$58,500	$58,500
Direct labor	40,700	—
Power and maintenance	3,800	20,100
Taxes, insurance, etc.	1,400	4,500
Selling and administrative expenses	40,700	40,700
Total expenses	$145,100	$123,800