Stella is tired of her sewing machine continually breaking down. The threading mechanism takes her significant...
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Stella is tired of her sewing machine continually breaking down. The threading mechanism takes her significant time to fix every time and sometimes causes tears in the fabric so she has to start over. The current machine cost her mother $575 many years ago. A local repair shops says the machine can be maintained for $125 per year, which will allow it to be used heavily for three more years. A replacement sewing machine will make things more efficient and Stella will be able to make an additional 3 swimsuits per hour. A new industrial sewing machine costs $1,400 and Stella is unsure of how she would depreciate it. If she opens the store, she will need two sewing machines. Issue #5 Replacing the sewing machine Analysis Conclusion/Recommendation SHWETA Issue #6 Sewing machine depreciation Analysis Stella is tired of her sewing machine continually breaking down. The threading mechanism takes her significant time to fix every time and sometimes causes tears in the fabric so she has to start over. The current machine cost her mother $575 many years ago. A local repair shops says the machine can be maintained for $125 per year, which will allow it to be used heavily for three more years. A replacement sewing machine will make things more efficient and Stella will be able to make an additional 3 swimsuits per hour. A new industrial sewing machine costs $1,400 and Stella is unsure of how she would depreciate it. If she opens the store, she will need two sewing machines. Issue #5 Replacing the sewing machine Analysis Conclusion/Recommendation SHWETA Issue #6 Sewing machine depreciation Analysis
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Answer rating: 100% (QA)
ANSWER There are a few different options for depreciation on the new sewing machines One option is the straightline method which would depreciate the machines equally over their five year life This wo... View the full answer
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
Posted Date:
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