Differential Analysis for Machine Replacement Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $78, 400, the accumulated depreciation is $31,400, 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 $163, 100. 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:

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Differential Analysis for Machine Replacement
Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic
components. The original cost of the machine is $78, 400, the accumulated depreciation is $31,400, 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 $163, 100. 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:
Transcribed Image Text:Differential Analysis for Machine Replacement Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $78, 400, the accumulated depreciation is $31,400, 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 $163, 100. 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:
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