Differential Analysis for Machine Replacement Proposal Flint Tooling Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine Cost of machine, 10-year life $106,700 Annual depreciation (straight-line) 10,670 Annual manufacturing costs, excluding depreciation 39,100 Annual nonmanufacturing operating expenses 12,900 Annual revenue 94,300 Current estimated selling price of the machine 36,700     New Machine Cost of machine, six-year life $138,000 Annual depreciation (straight-line) 23,000 Estimated annual manufacturing costs, exclusive of depreciation 18,900 Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. Required: 1.  Prepare a differential analysis as of November 8 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the total differential income that would result over the six-year period if the new machine is acquired. If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) November 8   Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative 2) Revenues       Proceeds from sale of old machine $fill in the blank b2f547fd3fac00c_1 $fill in the blank b2f547fd3fac00c_2 $fill in the blank b2f547fd3fac00c_3 Costs       Purchase price fill in the blank b2f547fd3fac00c_4 fill in the blank b2f547fd3fac00c_5 fill in the blank b2f547fd3fac00c_6 Annual manufacturing costs (6 yrs.) fill in the blank b2f547fd3fac00c_7 fill in the blank b2f547fd3fac00c_8 fill in the blank b2f547fd3fac00c_9 Income (Loss) $fill in the blank b2f547fd3fac00c_10 $fill in the blank b2f547fd3fac00c_11 $fill in the blank b2f547fd3fac00c_12 2.  What other factors should be considered before a final decision is reached? Are there any improvements in the quality of work turned out by the new machine? What opportunities are available for the use of the funds required to purchase the new machine? Are there any improvements in the quality of work turned out by the new machine and what opportunities are available for the use of the funds required to purchase the new machine? What affect would this decision have on employee morale? None of these choices is correct.

Differential Analysis for Machine Replacement Proposal Flint Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine Cost of machine, eight-year life $38,000 Annual depreciation (straight-line) 4,750 Annual manufacturing costs, excluding depreciation 12,400 Annual nonmanufacturing operating expenses 2,700 Annual revenue 32,400 Current estimated selling price of the machine 12,900     New Machine Cost of machine, six-year life $57,000 Annual depreciation (straight-line) 9,500 Estimated annual manufacturing costs, exclusive of depreciation 3,400   Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. Required: 1.  Prepare a differential analysis as of November 8 comparing operations…

DEPRECIATION (Deprec): Dunedin Drilling Company recently acquired a new machine at a cost of $350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of $30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. Worksheet: The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handing of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Year 3 through Year 8 and ignore the numbers shown in those years. Some…

Show Attempt History Current Attempt in Progress Wildhorse Co. purchased equipment on March 31, 2021, at a cost of $264,000. Management is considering the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other equipment. The new equipment has an estimated residual value of $8,000 and an estimated useful life of either four years or 80,000 units. Demand for the products produced by the equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces the following number of units each year: 14,600 units in 2021; 20,600 units in 2022; 19,800 units in 2023; 20,000 units in 2024; and 5,000 units in 2025. Wildhorse has a December 31 year end. 6 (a) - Your answer is partially correct. Prepare separate depreciation schedules for the life of the equipment using: (Round depreciation per unit to 2 decimal places, e.g. 5.28 and final answers to O…

eBook Differential Analysis Report for Machine Replacement White Noise Technologies Inc. assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $57,900, the accumulated depreciation is $23,200, its remaining useful life is five years, and its residual value is zero. A proposal was made to replace the present manufacturing procedure with a fully automatic machine that will cost $109,000. 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 current and proposed operations:   CurrentOperations ProposedOperations Sales $183,500   $183,500   Direct materials $62,500   $62,500   Direct labor 43,400   14,500   Power and maintenance 4,100   6,900   Taxes, insurance, etc. 1,400   4,800   Selling and administrative expenses 43,400   43,400   Total expenses…

Modified Accelerated Cost Recovery System An example of a depreciation schedule under the Modified Accelerated Cost Recovery System of depreciation is shown. The Internal Revenue Service (IRS) classifies various assets according to useful life and sets depreciation rates for each year of the asset’s life. This asset has a five year life. The MACRS rates are shown in the schedule. This example is for an asset with a cost of $40,000 and a salvage value of $4,000.     MODIFIED ACCELERATED COST RECOVERY SYSTEM Year Cost × Rate = DepreciationExpense AccumulatedDepreciation(End of Year) Book Value(End of Year) 1 $40,000   20.00%   $8,000     $8,000     $32,000     2 40,000   32.00%   12,800     20,800     19,200     3 40,000   19.20%   7,680     28,480     11,520     4 40,000   11.52%   4,608     33,088     6,912     5 40,000   11.52%   4,608     37,696     2,304     6 40,000   5.76%   2,304     40,000     0       Prepare a depreciation schedule showing the depreciation…

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 $61,100, the accumulated depreciation is $24,400, 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 $127,100. 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: Sales Direct materials Direct labor Power and maintenance Taxes, insurance, etc. Selling and administrative expenses Total expenses Revenues: Sales (5 years) Costs: Present Operations $193,700 $66,000 45,800 a. Prepare a differential analysis dated May 4 to determine…

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ex2. Differential Analysis for Machine Replacement Proposal Flint Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine Cost of machine, eight-year life $38,000 Annual depreciation (straight-line) 4,750 Annual manufacturing costs, excluding depreciation 12,400 Annual nonmanufacturing operating expenses 2,700 Annual revenue 32,400 Current estimated selling price of the machine 12,900     New Machine Cost of machine, six-year life $57,000 Annual depreciation (straight-line) 9,500 Estimated annual manufacturing costs, exclusive of depreciation 3,400   Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. Required: 1.  Prepare a differential analysis as of November 8 comparing…