Flint Tooling Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows:
P) Music and Podcasts, Free ar X CengageNOWv2 | Online teachin X Course Hero X New tab X + X https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false . . Ch. 25, Quiz B Differential Analysis for Machine Replacement Proposal ? Flint Tooling Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine Cost of machine, 10-year life $107,300 Annual depreciation (straight-line) 10,730 Annual manufacturing costs, excluding depreciation 38,700 Annual nonmanufacturing operating expenses 13,200 Annual revenue 94,500 Current estimated selling price of the machine 36,300 New Machine Cost of machine, six-year life $135,600 Annual depreciation (straight-line) 22,600 Estimated annual manufacturing costs, exclusive of depreciation 19,000 Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. Required: 1. Prepare a differential analysis as of November 8 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the total differential income that would result over the six-year period if the new machine is acquired. If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Type here to search O 9:52 PM 41 84OF 8/8/2021 741P) Music and Podcasts, Free ar X CengageNOWv2 | Online teachin X Homework Help - Q&A from On x New tab X + X C & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false . . Ch. 25, Quiz B indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) November 8 Continue with Replace Differential Effect Old Machine Old Machine on Income (Alternative 1) (Alternative 2) (Alternative 2) Revenues Proceeds from sale of old machine Costs Purchase price Annual manufacturing costs (6 yrs. ) Income (Loss) 2. What other factors should be considered before a final decision is reached? a. Are there any improvements in the quality of work turned out by the new machine? b. What opportunities are available for the use of the funds required to purchase the new machine? c. Are there any improvements in the quality of work turned out by the new machine and what opportunities are available for the use of the funds required to purchase the new machine? d. What affect would this decision have on employee morale? e. None of these choices is correct. 9:52 PM Type here to search O 41 8/8/2021 741
