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	$421,200
Current accumulated depreciation	312,800
Estimated annual variable manufacturing costs for machine	74,700
Estimated selling price of machine	153,300
Estimated remaining useful life (in years)	6
New Machine:
Purchase cost	$816,300
Estimated annual variable manufacturing costs for machine	46,900
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:
Annual differential decrease in cost	$fill in the blank
x number of years	fill in the blank
Total differential decrease in cost	fill in the blank
Proceeds from sale of present machine	fill in the blank	$fill in the blank
Cost of new machine		fill in the blank
Net differential (increase)/decrease in cost, six year total		$fill in the blank