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Question 11 Shelf-It Ltd. incurs the following costs to make each custom-made shelf: materials of $12, labour of $14, variable overhead of $5, and fixed overhead of $4. Each shelf normally sells for $51. A customer is offering to buy 1,800 units at $36 each. Shelf-It will incur additional costs of $2 per shelf to imprint a logo and to pay for shipping. (a) Prepare an incremental analysis for the special order. Reject Order Accept Order Incremental Revenue and Costs Revenues $ Costs Net income / (loss) $ (b) Should Shelf-It accept the special order?Question 13 Sew It Inc. has an industrial sewing machine that it has used for the past 5 years. The company is considering replacing the machine with a faster model as it is starting to break down more often. As it will be faster and eliminate overtime, it will increase revenues by $4,550 per year over its useful life of 8 years. Current Machine New Machine Original purchase cost $26,700 $25,000 Accumulated depreciation $21,100 Useful life 8 years 8 years If sold now, the current sewing machine would have a salvage value of $5,000. If it is used for the remainder of its useful life, the current sewing machine would have zero salvage value. The new sewing machine is expected to have zero salvage value after 8 years. Determine whether the current sewing machine should be replaced. (Ignore the time value of money.) (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Retain Replace Incremental cost savings Incremental revenues $ $ New machine cost Proceeds from sale of old machine Net Incremental savings $ The company replace the sewing machine