Question: Differential/Analysis for Machine Reptacement Ruggeway Digital Components Company assembles circuit boords by using a manually operated machine to insert electropic components. The original cost of


Differential/Analysis for Machine Reptacement Ruggeway Digital Components Company assembles circuit boords by using a manually operated machine to insert electropic components. The original cost of the machine is $92,500, the accumulated depreciotion is $37,000, its remaining useful ife is 5 years, and its residual value is negligible. On October 1 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $192,400. The automatic machine has an eitimated useful life of 5 years and no significant residuol value. For use in evaluating the proposal, the menagerial occountant Atcumulated the following annual data on present and proposed operations: a. Prepare a differential analysis doted October 1 to determine whether to continue with (Alternative 1) or replace (Afternative 2) the old machine. Prepare the analysis over the useful life of the new mochine. If an amount is zero, enter " 0. If required, use a minus sign to indicate a loss. b. Based only on the data presented, should the proposal be accepted? c. Differences in capacity between the two altematives is: to consider before a final decision is made
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