eBook Differential Analysis for Machine Replacement Kim Kwon Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $60,000, the accumulated depreciation is $24,000, its remaining useful life is five years, and its residual value is negligible. On May 4, 2014, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that will cost $180,000. 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 present and proposed operations: Proposed Present Operations $205,000 72,000 51,000 5,000 1,500 45,000 $174,500 Operations $205,000 72,000 Sales Direct materials Direct labor Power and maintenance Taxes, insurance, etc. Selling and administrative expenses Total expenses 18,000 4,000 45,000 $139,000 Hide a. Prepare a differential analysis dated May 4, 2014, to determine whether to continue with the old machi If an amount is zero, enter zero "O