Eliminate all of the overtime processing

Assignment Help Financial Accounting

Reference no: EM13922938

Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing.

	Current Machine	New Machine
Original purchase cost	$ 15,000	$ 24,800
Accumulated depreciation	$ 5,700	_
Estimated annual operating costs	$ 25,000	$ 19,700
Remaining useful life	5 years	5 years

If sold now, the current machine would have a salvage value of $ 8,900 . If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years.

Should the current machine be replaced? (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

	Retain Machine	Replace Machine	Net income increase(or decrease)
Operating Costs	?	?	?
New Machine cost	?	?	?
Salvage Value(Old)	?	?	?
Total	?	?	?
The current machine should be= replaced Or retained .

Reference no: EM13922938

Questions Cloud

Contribute to a roth ira : Michael is single and 35 years old. He is a participant in his employer’s sponsored retirement plan. How much can Michael contribute to a Roth IRA in each of the following alternative situations?

Lump sum assuming annual compounding : Find the following values for the lump sum assuming annual compounding:

Calculating diluted eps : When calculating diluted EPS at December 31, 2013, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averaged $9 per share during 2013? (Enter your answer in millions of shares.)

Information regarding the equipment : Tara's Medical Services purchases a large machine. The cost of the equipment is $85,000. It has a trade-in value of $15,000 with an estimated 7-year useful life. If this is the only equipment Tara's Medical Services has, after the one year of use, th..

Eliminate all of the overtime processing : Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating ..

What are some of the main advantages and limitations of mrp : What are some of the main advantages and limitations of MRP?

Contrast net change systems and regenerative systems for mrp : Contrast net change systems and regenerative systems for MRP.

How is safety stock included in a material requirements plan : How is safety stock included in a material requirements plan?

Contrast planned order receipts and scheduled receipts : Contrast planned order receipts and scheduled receipts.

User Account

All Pages