Question Assignment description
Kim Kwon Digital Parts
Firm assembles circuit boards by utilizing a operated by hand machine to insert
digital parts. The unique price of the machine is $60,000; the
collected depreciation is $24,000; its remaining life is 5 years; and its
residual worth is zero. On Could Four of the present 12 months, a proposal was made to
substitute the current manufacturing process with a totally automated machine that
has a buy worth of $180,000. The automated machine has an estimated helpful
life of 5 years and no vital residual worth. To be used in evaluating the
proposal, the accountant collected the next annual information on current and
proposed operations:
Current
Operation
Proposed
Operation
Gross sales
$205,000
$205,000
Direct supplies
$72,000
$72,000
Direct labor
$51,000
–
Energy and upkeep
$5,000
$18,000
Taxes, insurance coverage, and so on.
$1,500
$Four,000
Promoting and administrative
$45,000
$45,000
Whole bills
$174,500
$139,000
1.
Put together
a differential Assessment dated Could Four to find out whether or not to proceed with the
outdated machine (Various 1), or substitute it with the brand new machine (Various
2). Put together the Assessment over the helpful lifetime of the brand new machine.
Primarily based
solely on the info offered, ought to the proposal be accepted?
What
different elements ought to be thought-about earlier than a ultimate choice is made?
The paper ought to meet the
following necessities:
Be
2-Four pages in size, not counting the required title and reference pages.
Your paper ought to embody an introduction, a physique with at the very least two totally
developed paragraphs, and a conclusion.
Citations
ought to adhere to APA type.
Textbook (Managerial
Accounting 13 version, Warren, Reeve, Duchac).
