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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 de 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) New Machine: Purchase cost $785,300 Estimated annual variable manufacturing costs for machine 45,900 Estimated residual value Estimated useful life (in years) 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

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 de 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) New Machine: Purchase cost $785,300 Estimated annual variable manufacturing costs for machine 45,900 Estimated residual value Estimated useful life (in years) 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

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter11: Strategic Cost Management
Section: Chapter Questions
Problem 6E: Keith Golding has decided to purchase a personal computer. He has narrowed his choices to two: Brand...
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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
Transcribed Image Text: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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