1a.

Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $46,000 and a remaining useful life of five years. It can be sold now for $56,000. Variable manufacturing costs are $48,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine B Purchase price $ 117,669 $ 129,960 Variable manufacturing costs per year 19,688 14,068 (3) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) Ifthe machine should be replaced, which new machine should Lopez purchase? Complete this question by entering your answers in the tabs below. Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine A. (Amounts to be deducted should be indicated with a minus sign.) Reven ues Costs Purchase of new machine Variable manufacturing costs Income {loss} Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine B. (Amounts to be deducted should be indicated with a minus sign.) Income Increase Machine B: Keep or Replace Analysis Keep Replace (Decrease) from Replacing Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (loss) Complete this question by entering your answers in the tabs below. Req A Req B Req C and D (c) Should Lopez keep or replace its old machine? (d) If the machine should be replaced, which new machine should Lopez purchase? (c) Should Lopez keep or replace its old machine? (d) Which new machine should Lopez purchase? Skull Company makes snowboards and uses the total cost method in setting product price. Its costs for producing 12,000 units follow. The company targets a 12.0% markup on total cost. Variable Costs per Unit Direct materials $ 162 Direct labor 27 Overhead 22 Selling, general and administrative 8 Fixed Costs (total) Overhead $ 472,666 Selling, general and administrative 446,666 1. Compute the total cost per unit if12,000 units are produced. 2. Compute the dollar markup per unit. 3. Compute the selling price per unit. (For all requirements, round your final answers to the nearest dollar amounts.) 1. Total cost per unit 2. Markup per unit 3. Selling price per unit Rios Company makes drones and uses the variable cost method in setting product price. Its costs for producing 23,000 units follow. The company targets a profit of $303,000 on this product. Variable Costs per Unit Direct materials $ 73 Direct labor 43 Overhead 28 Selling, general and administrative 18 Fixed Costs (total) Overhead $ 673,990 Selling, general and administrative 595,996 1. Compute the total variable cost and the markup percentage. 2. Compute the dollar markup per unit on variable cost. 3. Compute the selling price per unit. (For all requirements, round your final answers to the nearest whole number.) 1. Total variable costs 1. Markup percentage 2. Markup per unit 3. Selling price per unit Pardo Company produces a single product and has capacity to produce 155,000 units per month. Costs to produce its current monthly sales of 124,000 units follow. The normal selling price of the product is $118 per unit. A new customer offers to purchase 31,000 units for $65.70 per unit. Ifthe special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Costs at 124,666 Per Unit Units Direct materials :3 12.56 $ 1,556,666 Direct labor 15.66 1,366,666 Variable overhead 13.66 1,612,666 Fixed overhead 17.56 2,176,666 Fixed general and administrative 15.66 1,866,666 Totals $ 73.66 $ 9,652,666 (3) Compute the income from the special offer. (b) Should the company accept the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.) Variable costs Contribution margin Fixed oosts Fixed overhead Fixed general and administrative Income Required B >