Question 1 Bryant Company has a factory machine with a book value of $87,000 and

Question

Question 1 Bryant Company has a factory machine with a book value of $87,000 and a remaining useful life of 7 years. It can be sold for $34,000. A new machine is available at a cost of $361,000. This machine will have a 7-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $593,200 to $509,900. Prepare an analysis showing whether the old machine should be retained or replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Retain Equipment Equipment Increase (Decrease) Replace Net Income Variable manufacturing costsd New machine cost Sell old machine Total The old factory machine should be LINK TO TEXT Question Attempts: 0 of 1 used SAVE FOR LATER SUBMIT ANSWER

Explanation / Answer

Bryant Company

The old factory machine should be: Replaced

Manson Industries

The decision should be to make the part.

Retain Equipment Replace Equipment Net Income
Increase (Decrease) Variable manufacturing costs (7 years) 4152400 3569300 583100 New machine cost 0 361000 -361000 Sell old machine 0 -34000 34000 Total $ 4152400 3896300 256100

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