Sarasota Company has a factory machine with a book value of $86,300 and a remaining useful life of 7 years. It can be sold for $33,500. A new machine is available at a cost of $359,000. This machine will have a 7-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $623,300 to $461,800. Prepare an analysis showing whether the old machine should be retained or replaced.

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Explanation:

Analysis showing whether the old machine should be retained or replaced is as prepared below:

                                                     Retain        Replace            Net Income

                                              Equipment     Equipment      Increase(Decrease)                            

Variable manufacturing costs 43,63,10032,32,60011,30,500

New machine costs                     0    3,59,000-3,59,000

Sell old machine                             0          -33,500          33,500

Total                                       43,63,100   35,58,100   8,05,000

The old factory machine should be replaced as there is increase in net income by 805,000 when old machine is replaced.

support your answer using the data presented. (5 points). 4. based on the information you used to schedule and curve, which product would you recommend the shoe hut focus on, and why? provide details that support your answer. (5 points).

the answer is 10c + 6b = 32

step-by-step explanation: