Ridgeway Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $ the accumulated depreciation is $ its remaining useful life is years, and its residual value is negligible. On October of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $ The automatic machine has an estimated useful life of years and no significant residual value. For use in evaluating the proposal, the managerial accountant accumulated the following annual data on present and proposed operations:
Line Item Description Present
Operations Proposed
Operations
Sales $ $
Direct materials $ $
Direct labor
Power and maintenance
Taxes, insurance, etc.
Selling and administrative expenses
Total expenses $ $
Question Content Area
a Prepare a differential analysis dated October to determine whether to continue with Alternative or replace Alternative the old machine. Prepare the analysis over the useful life of the new machine. If an amount is zero, enter If required, use a minus sign to indicate a loss.
