Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ASAP please, direct thumbs up multi part question 1-LN Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information:

image text in transcribed
image text in transcribed
ASAP please, direct thumbs up
multi part question
1-LN Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: Onginal cost Useful life Old Machine $10,700 Current age 10 years 7 years 3 years Remaining useful life Accumulated depreciation Book value Current disposal value in cash) Terminal disposal value (3 years from now) Annual cash operating costs New Machine $9,000 3 years O years 3 years Not acquired yet Not acquired yet Not acquired yet SO $15,500 $7.490 $3,210 $2,200 SO $17,500 LN Manufacturing uses straight-line depreciation a. Using incremental analysis determine whether LN Manufacturing should replace the old machine? (7 point) 1 b. What other factors should management consider in making its decision? (3 point) 2. (a) The Sacramento Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 30,000 units of Part No. 498 is as follows: per Direct materials Direct manufacturing labor 22 Variable manufacturing overhead 8 Fixed manufacturing overhead allocated 15 Total manufacturing cost per unit 50 The Counter Company has offered to sell 30.000 units of Part No 498 to Sacramento for $47 unit. Sacramento will make the decision to buy the part from Counter if there is an overall savings of at least $30,000 for Sacramento. If Sacramento accepts Counter's offer, $8 per unit of the fixed overhead allocated would be eliminated. Furthermore, Sacramento has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. For Sacramento to achieve an overall savings of $30,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be which of the following: (a) $90,000. (b) S150,000, (c) $180,000, or (d) $210,0007 Show your calculations I (7 points) (b) What other factors might Sacramento consider before outsourcing to Counter? 3 points) O E

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketing Audit And Performance A Case Of Parastatals Marketin Audit And Performance

Authors: Bonventure Onyango Odote, Wyckliffe Otieno Robby

1st Edition

365946595X, 978-3659465956

More Books

Students also viewed these Accounting questions