Lopez Company is considering re placing one of its old manufacturing machines. The old machine has a book value of $49,000 and a remaining useful life of ve years It can be sold novlI for $50000. Variable manufacturing costs are $50000 per year for this old machine. Info rrnation on two alternative replacement machines follows. The expected useful life ofeach replacement machine is ve years. Machine 1. Machine B- Purchase price $ 113,030 $ 13?,000 'u'ariable manufacturing costs per year 20,000 13,000 {a} Compute the income increase or decrease from replacing the old machine with Machine A. [h] Compute the income increase or decrease from replacing the old machine I.vith Machine B. [o] Should Lopez keep or replace its old machine? [cl] Ifthe ma chine should be replaced. which new machine should Lopez purchase? Cobe Company has manufactured 230 partiallyI nished cabinets at a cost of $30000. These can be sold as is for 3134.000. Instead. the cabinets can be stained and tted with hardware to make nished cabinets. Further processing costs would be $10300. and the nished cabinets could be sold for $111000. to} Prepare a sell as is or process further analysis of income effects. In] Should the cabinets be sold as is or processed further and then sold\"? Incremental income (loss) to pro-pass further {511112 oompan'y' should: JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution I'argin Inca-e Statement For 'l'ear Ended [Ecedoer 31 Per Lhit Annual Total Sales {530,000 units) .5 LEE 1: 4,060,000 'u'ariable costs Direct materials 1.52 939,600 Direct labor 0A3 33,1100 Variable overhead 3:39 454:393 Contribution margin 4.10 2,3?3,0l30 Fixed costs Fixed overhead 0.20 115,000 Fixed general and adninistrative 3'15 3?,390 Income .5 3.?5 $ 2,1?5,000 A potential customer offers to buyI 68.000 units for $3.60 each. These sales would not affect the company's sales through its normal channels. Details about the special offer follow. - Direct materials cost per unit and variable overhead cost per unit would not change. - Direct labor cost per unit would be $0.55 because the offer would require overtime pay. - Accepting the offer would require incremental led general and administrative costs of$E-.300. - Accepting the offer would require no incremental xed overhead costs Pequlred: 1. Compute income from the special offer. 1 Should the company accept or reject the special offer?