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Maltese company is considering purchasing either machine White which will increase revenues $20,000 or machine Blue which will increase revenues $25,000. Costs for machine White
Maltese company is considering purchasing either machine White which will increase revenues $20,000 or machine Blue which will increase revenues $25,000. Costs for machine White are direct materials $8,000, direct labor $9,000, variable overhead $1,000 and fixed overhead $500. Costs for machine Blue are direct materials $8,000, direct labor $12,000, variable overhead $4,000 and fixed overhead $500. Which machine should be purchased and why? A. Machine Blue because income will increase by $9,000 B. Machine White because income will increase by $10,000 C. Machine White because income will increase by $2,000 D. Machine Blue because income will increase by $1,000
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