PR 24-2B Differential analysis for machine replacement proposal Obj. 1 Flint Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: EXCEL TEMPLATE Old Machine $38,000 4,750 12,400 Cost of machine, eight-year life Annual depreciation (straight-line) Annual manufacturing costs, excluding depreciation Annual nonmanufacturing operating expenses Annual revenue Current estimated selling price of the machine 2,700 32,400 12,900 New Machine Cost of machine, six-year life Annual depreciation (straight-line) Estimated annual manufacturing costs, exclusive of depreciation $57,000 9,500 3,400 Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. Instructions 1. Prepare a differential analysis as of November 8 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the differential income that would result over the six-year period if the new machine is acquired. List other factors that should be considered before a final decision is reached. F G H I J K L M N O P Q R S T U W X Y C2 - Xf A B C D E 1 Problem 24(10)-2B Name: 3 Section: Score: 0 7 Koy Code Key code here 8 Instructions 9 Answers are entered in the cells with gray backgrounds. 10 Cells with non-gray backgrounds are protected and cannot be edited. 11 An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded. 12 Enter a zero in cells you would otherwise leave blank Differential Effect on Income (Alternative 2) Differential Analysis Continue with (Alt. 1) or Replace (Alt. 2) Old Machine November 8 Continue with Replace Old Machine Old Machine (Alternative 1) (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Annual manufacturing costs (6 yrs.) Income (loss) The proposal to replace the machine should be [Key essay answer here) PR 24-2B Differential analysis for machine replacement proposal Obj. 1 Flint Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: EXCEL TEMPLATE Old Machine $38,000 4,750 12,400 Cost of machine, eight-year life Annual depreciation (straight-line) Annual manufacturing costs, excluding depreciation Annual nonmanufacturing operating expenses Annual revenue Current estimated selling price of the machine 2,700 32,400 12,900 New Machine Cost of machine, six-year life Annual depreciation (straight-line) Estimated annual manufacturing costs, exclusive of depreciation $57,000 9,500 3,400 Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. Instructions 1. Prepare a differential analysis as of November 8 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the differential income that would result over the six-year period if the new machine is acquired. List other factors that should be considered before a final decision is reached. F G H I J K L M N O P Q R S T U W X Y C2 - Xf A B C D E 1 Problem 24(10)-2B Name: 3 Section: Score: 0 7 Koy Code Key code here 8 Instructions 9 Answers are entered in the cells with gray backgrounds. 10 Cells with non-gray backgrounds are protected and cannot be edited. 11 An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded. 12 Enter a zero in cells you would otherwise leave blank Differential Effect on Income (Alternative 2) Differential Analysis Continue with (Alt. 1) or Replace (Alt. 2) Old Machine November 8 Continue with Replace Old Machine Old Machine (Alternative 1) (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Annual manufacturing costs (6 yrs.) Income (loss) The proposal to replace the machine should be [Key essay answer here)