Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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Category > Accounting Posted 22 Jul 2017 My Price 4.00

guitar manufacturer

A guitar manufacturer is considering eliminating its electric guitar division because its $76,000 expenses are higher than its $72,000 sales. The company reports the following expenses for this division. Should the division be eliminated?

Cost of goods sold               

$55,000

 

Direct expenses                

6,250

$2,250

Indirect expenses               

470

3,600

Service department costs         

7,000

1,430

Tak Company has a machine with a book value of $50,000 and a remaining five-year useful life. A new machine is available at a cost of $75,000, and Tak can also receive $40,000 for trading in its old machine. The new machine will reduce variable manufacturing costs by $12,000 per year over its five-year useful life. Should the machine be replaced?

Answers

Maurice Tutor
(5)
Status NEW Posted 22 Jul 2017 10:07 PM My Price 4.00

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