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Keep or Replace Machine: Skiles Coporation is a manufacturer of classic rocking chairs. The company has been using a particular sanding and finishing machine for

Keep or Replace Machine:

Skiles Coporation is a manufacturer of classic rocking chairs. The company has been using a particular sanding and finishing machine for over 10 years and believes that it may be time to replace the machine. The company is trying to decide whether replacing the old machine is a wise economic decision. The company's controller pulled together the following information on the old machine and the new possible replacement machine.

Old Machine:
Original cost $434,600
Current accumulated depreciation 313,700
Estimated annual variable manufacturing costs for machine 72,550
Estimated selling price of machine 184,100
Estimated remaining useful life (in years) 6
New Machine:
Purchase cost $788,000
Estimated annual variable manufacturing costs for machine 45,650
Estimated residual value 0
Estimated useful life (in years) 6

Select the relevant or irrelevant information below:

Annual variable costs of old machine Relevant
Selling price of old machine Relevant
Matching lives Relevant
Purchase price of new machine Relevant
Accumulated depreciation of old machine Irrelevant

Fill in the differential analysis.

Replace or Keep Decision Differential Analysis Report
Cost of replacing old machine: N/A N/A
Annual differential decrease in cost $ ????? N/A
x number of years 6 N/A
Total differential decrease in cost ????? N/A
Proceeds from sale of present machine 184100 $?????
Cost of new machine N/A 788000
Net differential (increase)/decrease in cost, six year total N/A $????

Just need help with the ones with question marks. The N/A means nothing is required or available to put an answer.

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