Differential Analysis for Machine Replacement Boyer Digital Components Company assembles arcuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $53,400, the accumulated depreciation $21,400, 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 $111,100. 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: Sales Deect materials Direct labor Power and maintenance Taxes, insurance, etc Selling and administrative expenses Tutal expenses Present Operations Proposed Operations $169,300 $169,300 $57,700 $57,700 40.100 3,700 19,000 1,300 4,400 40,100 $142,900 40,100 $122,000 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 rers, enter "0", If requaret, use a minus sign to indicate a loss Revenues Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) Sales (5 years) Chuck My Work May 4 Continue with Old Machine Replace Old Machine Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) 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 Replace Old Machine Differential Effects (Altemative 1) (Alternative 2) (Alternative 2) Revenues: Sales (5 years) Costs: Purchase price Direct materials (5 years) Direct labor (5 yea Power and mantmance (5 years) taxes, insurance, etc. (5 years) Selling and adren expenses (5 years) Profit (Less) 00000000 b. Based only on the data presented should the proposal be accepted? c. Differmos in capacity between the two termoves is t consider before a final decision is made