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1. Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: New Machine $600,000 Old
1. Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: New Machine $600,000 Old Machine $300,000 90,000 10 years Price Accumulated Depreciation Remaining useful life Useful life 10 years $180,600 Annual operating costs $240,000 If the old machine is replaced, it can be sold for $24,000. Which of the following amounts is relevant to the replacement decision? A) $300,000 B) $59,400 C) $90,000 D) $210.000 8. Assuming that the direct materials used is $1,400,000, compute the total manufacturing costs using the following information. Raw materials inventory, January 1 Raw materials inventory, December 31 Work in process, January1 Work in process, December 31 Finished goods, January1 Finished goods, December 31 Raw materials purchases Direct labor Factory utilities Indirect labor Factory depreciation Operating expenses A) $2,360,000. B) $2,560,000. C) $2,980,000. D) $2,554,000. $ 20,000 40,000 18,000 12,000 40,000 32,000 1,400,000 560,000 150,000 50,000 400,000 420,000
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