Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,600 per year for this machine. Information on two alternative replacement machines follows. Alternative $118.000 22,200 Alternative $110,000 10,900 Cont 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? If the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below. Alternative A Alternative Xinhong Purchase Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) 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 $ 0 Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,600 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Alternative A $118,000 22,200 Alternative B $118,000 10,900 Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below. os Alternative A Alternative B Xinhong Purchase Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.) 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 $ 0 Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,600 per year for this machine. Information on two alternative replacement machines follows. Cost Alternative A $118,000 22,200 Alternative B $118,000 10,900 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? If the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below. Alternative A Alternative B Xinhong Purchase Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Which option should Xinhong choose? [The following Information applies to the questions displayed below.) Suresh Co. expects its five departments to yield the following income for next year. Dept. M $80,000 Dept. N $ 42,000 Dept. o $ 76,000 Dept. P $61,000 Dept. T $ 41,000 Total $300,000 Sales Expenses Avoidable Unavoidable Total expenses Net income (loss) 16,300 57,000 73,300 $ 6,700 44,200 20,400 64,600 $(22,600) 20,300 5,500 25,800 $50,200 20,500 50,200 70,700 $19,700) 49,500 18,900 68,400 $(27,400) 150,800 152,000 302,800 $ (2,800) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. (1) Management eliminates departments with expected net losses. DEPARTMENTS WITH EXPECTED NET LOSSES ELIMINATED Dept. M Dept. N Dept. o Dept. P Dept. T Total $ 0 Sales Expenses: Avoidable 0 Unavoidable 0 Total expenses Net Income (loss) $ 0 $ $ 0 $ 0 $ 0 $ 0
