Sunland Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing. New Machine $24,800 Original purchase cost Accumulated depreciation Estimated annual operating costs Remaining useful life Current Machine $15,200 $6,700 $24,700 5 years $19,600 5 years If sold now, the current machine would have a salvage value of $10,100. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years. Prepare an incremental analysis to determine whether the current machine should be replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number as 45 or parenthesese.g. (45).) Net Income Increase (Decrease) Retain Machine Replace Machine If sold now, the current machine would have a salvage value of $10,100. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years. Prepare an incremental analysis to determine whether the current machine should be replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the numberes. -45 or parentheses eg. (45).) Retain Machine Replace Machine Net Income Increase (Decrease) Operating costs $ New machine cost Salvage value (old) Total $ Oriole Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 20,100 golf discs is: Materials Labor $ 10,653 29,346 20,100 Variable overhead Fixed overhead 41,205 Total $101,304 Oriole also incurs 4% sales commission ($0.28) on each disc sold. McGee Corporation offers Oriole $4.90 per disc for 5,000 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Oriole. If Oriole accepts the offer, its fixed overhead will increase from $41,205 to $46,895 due to the purchase of a new imprinting machine. No sales commission will result from the special order. (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the numberes. -45 or parentheses e.g. (45).) We special order. (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number eg 45 or parentheses eg. (45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ $ $ Materials Labor Variable overhead Fixed overhead Sales commissions Net income $ $ w (b) Should Oriole accept the special order? Oriole should the special order accept e Textbook a reject Save for Later