Question
A.) Kobe Company has a factory machine with a book value of $90,700 and a remaining useful life of 5 years. It can be sold
A.)
Kobe Company has a factory machine with a book value of $90,700 and a remaining useful life of 5 years. It can be sold for $30,300. A new machine is available at a cost of $253,030. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $747,820 to $612,960. Prepare an analysis showing whether the old machine should be retained or replaced. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
B)
Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $6,810 from sales $199,500, variable costs $175,590, and fixed costs $30,720. If the Big Bart line is eliminated, $20,150 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
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