25 Differential Analysis, Product Pricing, and Activity-Based Costing a. Prepare a differential analysis dated May 4 to determine whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Prepare the analysis over the useful life of the new machine. b. Based only on the data presented, should the proposal be accepted? c. What other factors should be considered before a final decision is made? EX 25-10 Differential analysis for machine replacement . 1 a. Differential loss, 500 Excel Kim Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $60,000, the accumulated depreciation is $24,000, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $180,000. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: (Continued) 2:25 20211_ACG2071_WRD 27e_... bohere Ex. 25-10 on \begin{tabular}{|c|c|c|c|} \hline \\ \hline 3 & & nimen & mint. \\ \hline teneres & & & \\ \hline lonper & & & \\ \hline ine & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline binan in that & & & \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular} tarese = 25 Differential Analysis, Product Pricing, and Activity-Based Costing a. Prepare a differential analysis dated May 4 to determine whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Prepare the analysis over the useful life of the new machine. b. Based only on the data presented, should the proposal be accepted? c. What other factors should be considered before a final decision is made? EX 25-10 Differential analysis for machine replacement . 1 a. Differential loss, 500 Excel Kim Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $60,000, the accumulated depreciation is $24,000, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $180,000. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: (Continued) 2:25 20211_ACG2071_WRD 27e_... bohere Ex. 25-10 on \begin{tabular}{|c|c|c|c|} \hline \\ \hline 3 & & nimen & mint. \\ \hline teneres & & & \\ \hline lonper & & & \\ \hline ine & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline binan in that & & & \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular} tarese =
