Curl Limited is considering whether or not to accept an order. Production of the order would require use of three machines. You are provided with the following information: Machine A, which is used regularly by the business, would be used for a full month. The annual depreciation on this machine is €2,324. Machine B, which would be used for a week, has annual depreciation of €4,364. The machine would have to be adapted for this job with a new part costing €535. This adaptation to the machine is expected to reduce the scrap cost of the machine, at the end of its useful life next year, by €1,253. Machine C would have to be rented for one month at a cost of €838. What is the relevant cost of machinery on this order?
Curl Limited is considering whether or not to accept an order. Production of the order would require use of three machines. You are provided with the following information: Machine A, which is used regularly by the business, would be used for a full month. The annual depreciation on this machine is €2,324. Machine B, which would be used for a week, has annual depreciation of €4,364. The machine would have to be adapted for this job with a new part costing €535. This adaptation to the machine is expected to reduce the scrap cost of the machine, at the end of its useful life next year, by €1,253. Machine C would have to be rented for one month at a cost of €838. What is the relevant cost of machinery on this order?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Curl Limited is considering whether or not to accept an order. Production of the order would require use of three machines. You are provided with
the following information:
Machine A, which is used regularly by the business, would be used for a full month. The annual depreciation on this machine is €2,324.
Machine B, which would be used for a week, has annual depreciation of €4,364. The machine would have to be adapted for this job with a new
part costing €535. This adaptation to the machine is expected to reduce the scrap cost of the machine, at the end of its useful life next year, by
€1,253.
Machine C would have to be rented for one month at a cost of €838.
What is the relevant cost of machinery on this order?
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