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12-09Ex_5e - Decrease in direct labor costs Less Increase...

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Exercise 12-9 Name: Section: Score: 0% Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. A red asterisk (*) will appear in the row immediately to the right of an incorrect answer. a. Proposal to Replace Machine February 20, 2010 Annual costs and expenses - present machine Annual costs and expenses - new machine Annual differential decrease in costs and expenses Number of years applicable x Total differential decrease in costs and expenses Cost of new equipment Net differential increase in costs and expenses, 5-year total Annual differential increase in costs and expenses - new machine Calculations for annual differential decrease in costs and expenses:
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Unformatted text preview: Decrease in direct labor costs Less: Increase in power and maintenance Increase in taxes, insurance, etc. Annual differential decrease in costs and expenses b. From a financial perspective, is it advisable to replace the machine? c. I Does the proposed machinery provide the same production capacity as the old? What else could be done with the $111,000 cost of the proposal? Is quality improved by using automated machinery? Will the new machine support future changes in products, materials, etc.? Instructions Indicate which of the following questions are important in determining whether the proposal accepted and the old machine replaced. Important? l should be...
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