Please look at snippet to answer question Fill in the differential analysis.Replace or Keep DecisionDifferential Analysis Report Cost of replacing old machine: Annual differential decrease in costfill in the blank x number of yearsfill in the blank Total differential decrease in costfill in the blank Proceeds from sale of present machinefill in the blank fill in the blank Cost of new machine fill in the blank Net differential (increase)/decrease in cost, six year total $fill in the blank Keep or Replace Machine:Skiles Coporation is a manufacturer of classic rocking chairs. The company has been using a particular sanding and finishing machine for over 10 years and believes that it may be time to replace the machine. The company is trying to decidewhether replacing the old machine is a wise economic decision. The company's controller pulled together the following information on the old machine and the new possible replacement machine.Old Machine:Original cost$436,200Current accumulated depreciation323,700Estimated annual variable manufacturing costs for machine74,100Estimated selling price of machine177,400Estimated remaining useful life (in years)6New Machine:Purchase cost$785,300Estimated annual variable manufacturing costs for machine45,900Estimated residual valueEstimated useful life (in years)6Select the relevant or irrelevant information below:Annual variable costs of old machineRelevantSelling price of old machineRelevantMatching livesRelevantPurchase price of new machineRelevantAccumulated depreciation of old machine Irrelevant

The differential analysis is performed to analyse the different options available with the…

Answered: Keep or Replace Machine: Skiles…

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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Fill in the differential analysis.

Replace or Keep Decision Differential Analysis Report
Cost of replacing old machine:
Annual differential decrease in cost	fill in the blank
x number of years	fill in the blank
Total differential decrease in cost	fill in the blank
Proceeds from sale of present machine	fill in the blank	fill in the blank
Cost of new machine		fill in the blank
Net differential (increase)/decrease in cost, six year total		$fill in the blank

Keep or Replace Machine:
Skiles Coporation is a manufacturer of classic rocking chairs. The company has been using a particular sanding and finishing machine for over 10 years and believes that it may be time to replace the machine. The company is trying to decide
whether replacing the old machine is a wise economic decision. The company's controller pulled together the following information on the old machine and the new possible replacement machine.
Old Machine:
Original cost
$436,200
Current accumulated depreciation
323,700
Estimated annual variable manufacturing costs for machine
74,100
Estimated selling price of machine
177,400
Estimated remaining useful life (in years)
6
New Machine:
Purchase cost
$785,300
Estimated annual variable manufacturing costs for machine
45,900
Estimated residual value
Estimated useful life (in years)
6
Select the relevant or irrelevant information below:
Annual variable costs of old machine
Relevant
Selling price of old machine
Relevant
Matching lives
Relevant
Purchase price of new machine
Relevant
Accumulated depreciation of old machine Irrelevant

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