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Please help me correct the answers and provide the explanation. 22 Holmes Company has already spent $62,000 to harvest peanuts. Those peanuts can be sold
Please help me correct the answers and provide the explanation.
22 Holmes Company has already spent $62,000 to harvest peanuts. Those peanuts can be sold as is for $81,500. Alternatively, Holmes can process further into peanut butter at an additional cost of $413,000. If Holmes processes further, the peanut butter can be sold for $630,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Holmes sell as is or process further? 1.5/3 points awarded (a) Sell or Process Analysis Sell as is Scored Revenue $ $ Process Further 630,000 (475,000) X 155,000 X 81,500 (62,000) 19,500 Costs Income $ $ (b) The company should: Process further *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. 24 Rory Company has an old machine with a book value of $75,000 and a remaining five-year useful life. Rory is considering purchasing a new machine at a price of $104,000. Rory can sell its old machine now for $72,000. The old machine has variable manufacturing costs of $30,000 per year. The new machine will reduce variable manufacturing costs by $12,000 per year over its five-year useful life. (a) Prepare a keep or replace analysis of income effects for the machines. (b) Should the old machine be replaced? 1.88/3 points awarded Scored Complete this question by entering your answers in the tabs below. Required A Required B Prepare a keep or replace analysis of income effects for the machines. Keep or Replace Analysis Keep Replace Income Increase (Decrease) if replaced Revenues Sale of existing machine $ 0 $ 72,000 Costs Purchase of new machine $ 0 $ Variable manufacturing costs Income (loss) 150,000 (150,000) $ 104,000 60,000 X (92,000) X $ $ 58,000 XStep by Step Solution
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