Second Pic Income Amd Fixed As Soon As Possible 1 (30.43 KiB) Viewed 41 times
Second Pic Income Amd Fixed As Soon As Possible 2 (29.85 KiB) Viewed 41 times
Rory Company has an old machine with a book value of $75,000 and a remaining five-year useful life. Rory is considering purchasing a new machine at a price of $90,000. Rory can sell its old machine now for $60,000. The old machine has variable manufacturing costs of $33,000 per year. The new machine will reduce variable manufacturing costs by $13,000 per year over its five year useful life (a) Prepare a keep or replace analysis of income effects for the machines (6) Should the old machine be replaced? Complete this question by entering your answers in the tabs below. CH Required A Required Prepare a keep or replace analysis of income effects for the machines Keep Replace Income increase Decrease) if replaced $ 60 000 Keep or Replace Analysis Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs incomo loss) 90.000 $ 165.000 100.000 35,000 REA Required B >
Radar Company sells bikes for $300 each. The company currently sells 3750 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $225 each to make $150 in variable costs per bike and $75 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 750 bikes for $250 each. Incremental fixed costs to make this order are $60 per bike. No other costs will change if this order is accepted. (a) Compute the income for the special offer. (b) Should Radar accept this offer? Per Unit $ (0) Special offer analysis Sales Vanable costs Contribution margin Fixed costs (incremental) Income Total 187 500 112 500 75 000 $ (b) The company should Accept special offer
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