Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $84,300, the accumulated depreciation is $33,700, 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 $175,300. 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:

	Present Operations		Proposed Operations
Sales	$267,200		$267,200
Direct materials	$91,000		$91,000
Direct labor	63,200
Power and maintenance	5,900		31,200
Taxes, insurance, etc.	2,100		7,000
Selling and administrative expenses	63,200		63,200
Total expenses	$225,400		$192,400

Question Content Area

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. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.

Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) May 4

	Continue with Old Machine (Alternative 1)	Replace Old Machine (Alternative 2)	Differential Effects (Alternative 2)
Revenues:	blank	blank	blank
Sales (5 years)	$fill in the blank 982f530d6058f94_1	$fill in the blank 982f530d6058f94_2	$fill in the blank 982f530d6058f94_3
Costs:
Purchase price	fill in the blank 982f530d6058f94_4	fill in the blank 982f530d6058f94_5	fill in the blank 982f530d6058f94_6
Direct materials (5 years)	fill in the blank 982f530d6058f94_7	fill in the blank 982f530d6058f94_8	fill in the blank 982f530d6058f94_9
Direct labor (5 years)	fill in the blank 982f530d6058f94_10	fill in the blank 982f530d6058f94_11	fill in the blank 982f530d6058f94_12
Power and maintenance (5 years)	fill in the blank 982f530d6058f94_13	fill in the blank 982f530d6058f94_14	fill in the blank 982f530d6058f94_15
Taxes, insurance, etc. (5 years)	fill in the blank 982f530d6058f94_16	fill in the blank 982f530d6058f94_17	fill in the blank 982f530d6058f94_18
Selling and admin. expenses (5 years)	fill in the blank 982f530d6058f94_19	fill in the blank 982f530d6058f94_20	fill in the blank 982f530d6058f94_21
Profit (Loss)	$fill in the blank 982f530d6058f94_22	$fill in the blank 982f530d6058f94_23	$fill in the blank 982f530d6058f94_24