options for b are: should be accepted or should not be accepted

options for c are: relevant or not relevant

Differential Analysis for Machine Replacement Boyer Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $64,000, the accumulated depreciation is $25,600, its remaining useful life is five years, and its residual value is negligible. On May 4 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $133,100. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on present and proposed operations: Proposed Operations Sales Present Operations $202,900 $69,100 48,000 $202,900 $69,100 4,500 Direct materials Direct labor Power and maintenance Taxes, insurance, etc. Selling and administrative expenses Total expenses 1,600 23,700 5,300 48,000 $146,100 48,000 $171,200 a. Prepare a differential analysis dated May 4 to determine whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Prepare the analysis over the useful life of the new machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. a. Prepare a differential analysis dated May 4 to determine whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Prepare the analysis over the useful life of the new machine. If an amount is zero, enter "O". If required, use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) May 4 Continue with Old Replace Differential Machine Old Machine Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues: Sales (5 years) Costs: 1 Purchase price Direct materials (5 years) Direct labor (5 years) Power and maintenance (5 years) Taxes, insurance, etc. (5 years) Selling and admin. expenses (5 years) Profit (Loss) b. Based only on the data presented, should the proposal be accepted? c. Differences in capacity between the two alternatives is decision is made. to consider before a final