Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $45,00 remaining useful life of

image text in transcribed

Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $45,00 remaining useful life of four years. It can be sold now for $55,000. Variable manufacturing costs are $47,000 per year for this machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machin years. Machine A Purchase price Variable manufacturing costs per year $ 125,000 19,000 Machine B $ 139,000 13,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) If the machine should be replaced, which new machine should Lopez purchase? Complete this question by entering your answers in the tabs below. Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine B. (Amounts to be deducted should be indicated with a minus sign.) Machine B: Keep or Replace Analysis Keep Replace Income Increase (Decrease) from Replacing Revenues Sale of existing machine $ 0 $ 55,000 Costs Purchase of new machine $ 0 (139,000) Variable manufacturing costs Income (loss) $ 0 $ (84,000) $ (84,000)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Accounting

Authors: Belverd Needles, Marian Powers, Susan Crosson

10th edition

618736611, 978-1111809508, 111180950X, 978-0618736614

More Books

Students also viewed these Accounting questions

Question

Outline three of Vivess contributions to psychological thought.

Answered: 1 week ago

Question

Explain the causes of indiscipline.

Answered: 1 week ago

Question

Explain the factors influencing wage and salary administration.

Answered: 1 week ago

Question

What kind of rays are X-rays?

Answered: 1 week ago

Question

Where do you already feel changes?

Answered: 1 week ago

Question

Which circumstances are the most difficult ones for you?

Answered: 1 week ago