Lease or Sell Kincaid Company owns equipment with a cost of $363,500 and accumulated depreciation of $56,300 that can be sold for $275,200, less a 5% sales commission. Alternatively, Kincaid Company can lease the equipment for three years for a total of $288,300, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Kincaid Company on the equipment would total $15,200 over the three year lease. a. Prepare a differential analysis on August 7 as to whether Kincaid Company should lease (Alternative 1) or sell (Alternative 2) the equipment. If required, use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) August 7 Lease Sell Differential Equipment Equipment Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues 288,300 275,200 -13,100 $ Costs Profit (Loss) Accounting numeric field b. Should Kincaid Company lease (Alternative 1) or sell (Alternative 2) the equipment? Sell the equipment Joint Cost Allocation-Weighted Average Method Gary's Grooves Co. produces two types of carving knives, one with a handle made of a polymer that looks like walnut wood and another with a handle made with a polymer that looks like red oak. The knives are made through a joint production molding process that produces 273 knife blades for red oak handle knives and 294 knife blades for walnut handle knives at the split-off point. The polymer for the red oak handle knife blades requires twice as much cooling time as the polymer for the walnut handle knife blades, although all knives are removed from the joint molding process at the same time (i.e., once the cooling for the red oak handle knives is complete). The joint production process costs a total of $5,500 Assuming the company allo stes joint costs using the weighted average method based on the required cooling time of the two joint products, determine the amount of joint production costs allocated to each type of knife using the weighted average method. Joint Product Allocation Red oak handle carving knife 273 Walnut handle carving knife 294 Totals