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 $45,000 and a remaining useful life

image text in transcribedimage text in transcribedimage text in transcribed
Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $45,000 and a remaining useful life of five years. It can be sold now for 9552.000. Variable manufacturing costs are $36,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine B Purchase price 5 115,066 $ 125,066 Variable manufacturing costs per year 19,666 15,066 [3} Compute the income increase or decrease from replacing the old machine with Machine A. lb} Compute the income increase or decrease from replacing the old machine with Machine El. [1:] Should Lopez keep or replace its old machine? [d] lfthe 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 Rea C and D Compute the income increase or decrease from replacing the old machine with Machine A. (Amounts to be deducted should be indicated with a minus sign.) Revenues Sale of existing machine Purchase of new machine Variable manufacturing costs Income {loss} Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $45,000 and a remaining useful life of five years. It can be sold now for $52000. Variable manufacturing costs are $36,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine B Purchase price $ 115,066 5 125,066 Variable manufacturing costs per year 19,066 15,066 [3} 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. (1:) 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.) Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (loss) ( Rqu ReqCandD ) Lopez lCompany is considering replacing one of its old manufacturing machines. The old machine has a book value of$45,000 and a remaining useful life of five years. It can be sold now for $52,000. Variable manufacturing costs are $30000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine B Purchase price $ 115,000 $ 125,000 Variable manufacturing costs per' year' 19,000 15,000 in} Compute the income increase or decrease from replacing the old machine with Machine A. lb} Compute the income increase or decrease from replacing the old machine with Machine B. it] Should Lopez keep or replace its old machine? id} lfthe 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 {c} Should Lopez keep or replace its old machine? {d} If the machine should be replaced, which new machine should Lopez purchase? (c) Should Lopez keep or replace its old machine? (d) Which new machine should Lopez purchase?

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

Step: 3

blur-text-image

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

Financial Accounting Plus

Authors: Robert Libby, Patricia Libby, Daniel Short

8th Edition

1259116832, 9781259116834

More Books

Students also viewed these Accounting questions

Question

6. How can hidden knowledge guide our actions?

Answered: 1 week ago

Question

7. How can the models we use have a detrimental effect on others?

Answered: 1 week ago