60.1K

Verified Solution

Link Copied!

Ridgeway Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $58,400, the accumulated depreciation is $23,400, its remaining useful life is 5 years, and its residual value is negligible. On October 1 of the current yoar, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $121,500. The automatic machine has an estimated useful life of 5 years and no significant residual value. For use in evaluating the proposal, the managerial accountant accumulated the foliowing annual data on present and proposed operations: a. Prepare a differential analysis dated October 1 to determine whether to continue with (Aternative 1) or replace (Alternative 2 ) the old machine. Prepare the analysis over the useful life of the new machine. If an amount is zero, enter " 0, if requlred, use a minus sign to indicate a loss: Differential Analysis Continue with (Alt. 1 ) or Replace (AIt, 2) Old Machine a. Prepare a differential analysis dated October 1 to determine whether to continue with (Alternative 1) or replace (Alternative 2 ) the old machine. Prepare the analysis over the useful life of the new machine. If an amount is zero, enter " 0. If required, use a minus sign to indicate a loss

Answer & Explanation Solved by verified expert

See Answer