Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing. New Machine $25,100 Original purchase cost Accumulated depreciation Estimated annual operating costs Remaining useful life Current Machine $15,300 $6,200 $24,800 5 years $19,800 5 years If sold now, the current machine would have a salvage value of $10,800. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years. Prepare an incremental analysis to determine whether the current machine should be replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg: (45).) Retain Net Income Increase (Decrease) Replace Machine Machine $ $ Operating costs New machine cost Salvage value (old) Total $ $ The current machine should be Anna Garden recently opened her own basketweaving studio. She sells finished baskets in addition to selling the raw materials needed by customers to weave baskets of their own. Unfortunately, owing to space limitations, Anna is unable to carry all varieties of kits originally assembled and must choose between two basic packages. The Basic Kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Anna $10 and sells for $23. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the reeds and weave the basket. Anna produces the Stage 2 kit by using the materials included in the Basic Kit. Because she is more efficient at cutting and dying reeds than her average customer, Anna is able to produce two Stage 2 kits in one hour from one Basic Kit. (She values her time at $20 per hour.) The Stage 2 kit sells for $33. (21) Prepare an incremental analysis for the Anna's basketweaving studio. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses eg. (45).) Sell (Basic Kit) Process Further (Two Stage 2 Kits) Net Income Increase (Decrease) $ $ $ Sales per unit Costs per unit Direct materials $ $ $ Direct labor Total $ $ $ $ $ Net income per unit $ $ $