Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Textbook Question
Chapter 12, Problem 12.2.2P
Differential analysis report for machine replacement proposal
Catalina 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:
Annual nonmanufacturing operating expenses and revenue are not expected to be affected by the purchase of the new machine.
Instructions
List other factors that should be considered before a final decision is reached.
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Differential Analysis Report for Machine Replacement Proposal
(PLEASE SEE QUESTION OVERVIEW IN ATTACHMENT)
Franklin Printing 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
$107,800
Annual depreciation (straight-line)
10,780
Annual manufacturing costs, excluding depreciation
37,600
Annual nonmanufacturing operating expenses
12,500
Annual revenue
95,100
Current estimated selling price of the machine
35,700
New Machine
Cost of machine, six-year life
$138,000
Annual depreciation (straight-line)
23,000
Estimated annual manufacturing costs, exclusive of depreciation
19,000
Annual nonmanufacturing operation expenses
10,000
Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of…
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.
Instructions
1. Prepare a differential ananlysis as of November 8 comparing operations using…
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…
Chapter 12 Solutions
Survey of Accounting (Accounting I)
Ch. 12 - Mario Company is considering discontinuing a...Ch. 12 - Victor Company is considering disposing of...Ch. 12 - Prob. 3SEQCh. 12 - For which cost concept used in applying (he...Ch. 12 - Prob. 5SEQCh. 12 - Prob. 1CDQCh. 12 - Prob. 2CDQCh. 12 - A company could sell a building for $650,000 or...Ch. 12 - Prob. 4CDQCh. 12 - Prob. 5CDQ
Ch. 12 - A company fabricates a component at a cost of...Ch. 12 - Prob. 7CDQCh. 12 - Prob. 8CDQCh. 12 - Prob. 9CDQCh. 12 - Prob. 10CDQCh. 12 - Prob. 11CDQCh. 12 - Prob. 12CDQCh. 12 - Lease or sell decision Orwell Industries is...Ch. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Make-or-buy decision Watts Technologies Company...Ch. 12 - Make-or-buy decision Wisconsin Arts of Milwaukee...Ch. 12 - Machine replacement decision Creekside Products...Ch. 12 - Differential analysis report for machine...Ch. 12 - Sell or process further St. Paul Lumber Company...Ch. 12 - Prob. 12.11ECh. 12 - Decision on accepting additional business Madison...Ch. 12 - Accepting business at a special price Palomar...Ch. 12 - Prob. 12.14ECh. 12 - Total cost concept of product costing Willis...Ch. 12 - Product cost concept of product pricing Based on...Ch. 12 - Variable cost concept of product pricing Based on...Ch. 12 - Target costing Toyota Motor Corporation (TM) uses...Ch. 12 - Differential analysis report involving opportunity...Ch. 12 - Prob. 12.1.2PCh. 12 - Prob. 12.1.3PCh. 12 - Differential analysis report for machine...Ch. 12 - Differential analysis report for machine...Ch. 12 - Differential analysis report for sales promotion...Ch. 12 - Differential analysis report for sales promotion...Ch. 12 - Differential analysis report for further...Ch. 12 - Prob. 12.4.2PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.5.2PCh. 12 - Prob. 12.5.3PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.5.5PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.1MBACh. 12 - Prob. 12.2MBACh. 12 - Prob. 12.3.1MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.3.3MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.4.2MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.5.1MBACh. 12 - Prob. 12.5.2MBACh. 12 - Prob. 12.5.3MBACh. 12 - Product pricing Bev Frazier is a cost accountant...Ch. 12 - Prob. 12.2CCh. 12 - Prob. 12.3CCh. 12 - Cost-plus and target costing concepts The...Ch. 12 - Cost-plus and target costing concepts The...
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