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Q7.39: Granny and Gramps, Inc. manufact piece of equipment that will save labor costs. An analysis of monthly costs and revenues with and without the
Q7.39: Granny and Gramps, Inc. manufact piece of equipment that will save labor costs. An analysis of monthly costs and revenues with and without the new equipment follows: ures rocking chairs. The company is considering leasing a new With New Without New Machine $200,000 s200,000 $75,000 $45,000 $15,000 $67,000 Machine Sales Direct materials Direct labor Variable overhead$15,000 Fixed overhead $67,000 Lease payment $75,000 $30,000 $ 3,000 $0 What is the annual cost saving from leasing the new machine? A $150,000 B $75,000 C $12,000 D $144,000
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