Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/66489bef86c4a_54366489bef28422.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/66489bf027a17_54366489befbadbe.jpg)
Transcribed Image Text:
Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $46,000 and a remaining useful life of four years. It can be sold now for $56,000. Variable manufacturing costs are $49,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is four years. Purchase price Variable manufacturing costs per year Machine A $123,000 22,000 Machine B $ 138,000 13,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) If the machine should be replaced, which new machine should Lopez purchase? Complete this question by entering your answers in the tabs below. Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine A. Note: Amounts to be deducted should be indicated with a minus sign. Machine A: Keep or Replace Analysis Keep Revenues Sale of existing machine Costs Replace Income Increase (Decrease) from Replacing Purchase of new machine Variable manufacturing costs Income (loss) 0 Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine B. Note: Amounts to be deducted should be indicated with a minus sign. Machine B: Keep or Replace Analysis Keep Revenues Replace Income Increase (Decrease) from Replacing Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (loss) < Req A Req C and D > Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $46,000 and a remaining useful life of four years. It can be sold now for $56,000. Variable manufacturing costs are $49,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is four years. Purchase price Variable manufacturing costs per year Machine A $123,000 22,000 Machine B $ 138,000 13,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) If the machine should be replaced, which new machine should Lopez purchase? Complete this question by entering your answers in the tabs below. Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine A. Note: Amounts to be deducted should be indicated with a minus sign. Machine A: Keep or Replace Analysis Keep Revenues Sale of existing machine Costs Replace Income Increase (Decrease) from Replacing Purchase of new machine Variable manufacturing costs Income (loss) 0 Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine B. Note: Amounts to be deducted should be indicated with a minus sign. Machine B: Keep or Replace Analysis Keep Revenues Replace Income Increase (Decrease) from Replacing Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (loss) < Req A Req C and D >
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
There is a bond on the spot-market. Price is 87.63 USD. Risk-free interest rate is 1.22%. The forward-price is 102.78 USD. Is there any arbitrage possibility if time to maturity is 9 months?
-
The following is an excerpt from a conversation between Kate Fleming and Bob Dent. Kate is debating whether to buy a stereo system from Design Sound, a locally owned electronics store, or Big Sound...
-
The data on the following page represent the pulse rates (beats per minute) of nine students enrolled in a section of Sullivans Introductory Statistics course. Treat the nine students as a...
-
After an intense period of negotiation, Global Enterprises Corporation TA 2, 3 agreed to purchase all of the outstanding common shares of The Carlton Corporation. The agreed-upon price was \($294\)...
-
Wu Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in...
-
Statistics Binary Logistics regression What is the relationship between gender and democracy? Males and females are voting democracy or non - democracy. Q 1 0 1 . Gender of respondent * Democracy (...
-
An experimental measurement has a result (4.5 0.3) m, and a predicted value of 5.2m. How many standard deviations is the experimental measurement from the predicted value? What is the percent age...
-
Define accessibility SAP.
-
What are the constants involved in the reputation pattern if any?
-
Describe a few contexts in which accessibility is used in day-to-day life.
-
What are such modifications and their effects?
-
Do the constraints reduce the number of applications for the reputation pattern?
-
Write a reaction to represent generation of OH radical in the clean air. Describe two of its reactions with air pollutants (CO and CH4).
-
Prove the formula for (d/dx)(cos-1x) by the same method as for (d/dx)(sin-1x).
-
Is the statement of financial position of any use?
-
State whether the following are true or false. If false, explain why. (a) A statement of fi nancial position is a collection of assets, liabilities and equity. (b) Inventory, bank and trade payables...
-
The following financial details are for Jane Bricker as at 31 December 2012. Required: Jane Brickers capital employed as at 31 December 2012. Equity 1 January 2012 Drawings 5,000 Profit 7,000 12,000
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App