Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $40,000 and a remaining useful life of four

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $40,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $50,000 Variable manufacturing costs are $33700 per year for this machine. Information on two alternative replacement machines follows Alternative $117,000 22,200 Alternative 5111,000 10,600 Cost Variable manufacturing costs per year Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below. Xinhong Alternative A alternative Purchase Calculate the total change in net income of Alternative Als adopted. (Cath outflows thould be indicated by a minus sign) ALTERNATIVE AS INCREASE OR (DECREASE) IN NET INCOME Cast to buy new machine Cash received to trade in old machine Reduction in Variable manufacturing costs Totalcan in het income Cost Variable manufacturing costs per year Alternative A $117,000 22,200 Alternative B $111,000 10,600 Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong k the machine should be replaced, which alternative new machine should Xinhong purchas Complete this question by entering your answers in the tabs below. Alternative A Alternative B Xinhong Purchase Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income Say rk i Variable manufacturing costs per year 22,200 Calculate the total change in net income if Alternative A, B is adopte the machine should be replaced, which alternative new machine sh Complete this question by entering your answers in the tabs Alternative A Alternative B Xinhong Purchase Calculate the total change in net income if Alternative B is adopted. (C ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Strategies For Small Audit Shops

Authors: David O'Regan

2nd Edition

0894134701, 978-0894134708

More Books

Students also viewed these Accounting questions