Differential Analysis Report for Machine Replacement Lone Wolf Technologies Inc. assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $82,800, the accumulated depreciation is $33,100, its remaining us life is five years, and its residual value is zero. A proposal was made to replace the present manufacturing procedure with a fully automatic machine that will cost $156,000. The automatic machine has an estimated useful life of fi years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on current and proposed operations: Current Proposed Operations Operations Sales $262,500 $262,500 Direct materials $89,400 589,400 Direct labor 62,100 20,700 Power and maintenance 5,800 9,900 2,100 6,900 Taxes, insurance, etc. Selling and administrative expenses 62,100 62,100 Total expenses $221,500 $189,000 a. Prepare a differential analysis report for the proposal to replace the machine. Indude in the analysis both the net differential change in costs anticipated over the five years and the net annual differential change in costs anticipated LONE WOLF TECHNOLOGIES Replace Machine Differential Analysis Report Annual costs and expenses-present machine Annual costs and expenses-new machine Annual differential decrease in costs and expenses $ Number of years applicable Total differential decrease in costs and expenses Cost of new machine Net differential decrease in costs and expenses, five-year total Annual net differential decrease in costs and expenses-new machine