Differential Analysis for Machine Replacement Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $75,900, the accumulated depreciation is $30,400, 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 $157,900. 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: Proposed Operations Sales Present Operations $240,600 $82,000 56,900 $240,600 $82,000 Direct materials Direct labor 5.300 23.100 6.300 Power and maintenance Taxes, insurance, etc. Selling and administrative expenses Total expenses 1,900 56.900 56,900 $200,000 $173,300 . 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 us e of the new machine. If an amount is zero, enter"O. If required, use a minus sign to indicate a loss Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Art. 2) May 4 with on Machine Replace Old Machine Differential Effects Checky Work All work saved mal structor Save and be submit Assignment for Grading 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 (Art. 1) or Replace Old Machine (Alt. 2) May 4 Continue with Old Replace Differential Machine Old Machine Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues: Sales (5 years) Costs Purchase price Direct materials (5 years) Direct labor (5 years) Power and maintenance (5 years) Tases, insurance, etc. (5 years) Selling and admin expenses (5 years) T Proft (Low) b. Based only on the data presented, should the proposal be accepted? c. Differences in capacity between the two alternatives is to consider before a final decision is made Check My Work Previous Next > Al work saved Email instructor Save and be submit Assignment for Grading