Question: Guthridge Soap Corporation is evaluating a new soap cutting machine that could eliminate some direct labor costs. The machine would cost $900,000 per year and

Guthridge Soap Corporation is evaluating a new soap cutting machine that could eliminate some direct labor costs. The machine would cost $900,000 per year and would cost $0.10 per bar to cut the soap. Currently, Guthridge uses direct labor to cut the soap into bars, which costs $1 per bar. The company currently produces 500,000 bars of soap per year. Should it buy the machine?

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