Differential Analysis Report for Machine Replacement White Noise Technologies Inc. assembles circuit boards by using a manually operated machine to intert electronic components. The original cost of the machine is $68,400, the accumulated depreciation is $27,400, its remaining useful te is five years, and its residual value is zero. A proposal was made to replace the present manufacturing procedure with a fully automatic machine that will cost $128,600. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on current and proposed operations: Proposed Operations Current Operations Sales 5216,800 $216,800 Direct materials $73,900 373.900 51,300 Direct labor 17.100 4.800 8.200 Power and maintenance 1.700 Taxes, Insurance, etc. 5.700 51300 51.300 Selling and administrative expenses 5133.000 $156,200 Total expenses a. Prepare a differential analysis report for the proposal to replace the machine. Include in the analysis on the net differential change in costs anticipated over the five years and the net anal aferential change in costs anticipated. WHITE NOTSE TECHNOLOGIES INC. WHITE NOISE TECHNOLOGIES INC. Replace Machine Differential Analysis Report Annual costs and expenses--present machine Annual costs and expenses-new machine Number of years applicable Cost of new machine Annual net differential decrease in costs and expenses-new machine b. Based only on the data presented, should the proposal be accepted? c. What are some of the other factors that should be considered before a final decision is made? 1. Do present and proposed operations provide the same capacity? 2. What are the opportunity costs associated with alternative uses of the $128.600 outlay required to p 3. Is the product improved by using automatic machinery? 4. What is the book value of the manually operated machine that will be replaced Check My Work 10 more Check My Work uses remaining Annual net differential decrease in costs and expenses-new machine