- Xinhong Company Is Considering Replacing One Of Its Manufacturing Machines The Machine Has A Book Value Of 41 000 And 1 (32.28 KiB) Viewed 27 times
- Xinhong Company Is Considering Replacing One Of Its Manufacturing Machines The Machine Has A Book Value Of 41 000 And 2 (30.31 KiB) Viewed 27 times
- Xinhong Company Is Considering Replacing One Of Its Manufacturing Machines The Machine Has A Book Value Of 41 000 And 3 (31.27 KiB) Viewed 27 times
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $41,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $51.000. Variable manufacturing costs are $33.800 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Alternative A $121,000 22,000 Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income Alternative B $119,000 10,000 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Alternative A Alternative D Xinhong Purchase 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 new machine $(110,000) 51,000 118,000 $50,000 Pray 1 of 5 # Next > Return to question
The company has an opportunity to sell 30,000 additional units at $13 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 15% and (2) administrative expenses would increase by $129,000. Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit. Should the company accept or reject the offer? Complete this question by entering your answers in the tabs below. Net Income Accept or Reject Answer is complete but not entirely correct. Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit. Sales Costs and expenses Direct materials Direct labor Overhead Selling expenses Ⓒ • · · S Normal Volume Additional Volume 4.500,000$ 300,000 600,000 1,200,000 300,000 450,000 60,000 120,000✔✔ 48,000 0 Combined Total 4,890,000 W 660,000 1,320,000 348,000 450,000 Return to question