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Homework answers / question archive / Exercise 23-10 Keep or replace LO P5 Xinhong Company is considering replacing one of its manufacturing machines

Exercise 23-10 Keep or replace LO P5 Xinhong Company is considering replacing one of its manufacturing machines

Accounting

Exercise 23-10 Keep or replace LO P5 Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $39.000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $49,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows Alternative $121,000 $116,eee variable manufacturing costs per year 22,300 Alternative e Cost 10,500 Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? ir the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below. Alternative A Alternative 8 Xinhong Purchase Calculate the total change in net income if Alternatibus A is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine 49,000 Reduction in variable manufacturing costs 58,000 Total change in net income $107.000 NIVEA Alternative B >
Exercise 23-10 Keep or replace LO P5 Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $39.000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $49,000. Variable manufacturing costs are $33.900 per year for this machine. Information on two alternative replacement machines follows Alternative A Alternative B Cost $121,000 $116,000 Variable manufacturing costs per year 22,300 10,5ee Calculate the total change in net income if Alternative A, B is adopted Should Xinhong keep or replace its manufacturing machine? ir the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below. Alternative A Allnative Xinhong Durchase Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy now machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income 0

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