Accounting 2 Homework Problems

Xu Company is considering replacing one of its manufacturing machines. The machine has a book value of $38,000 and a remaining useful life of 4 years, at which time its salvage value will be zero. It has a current market value of $48,000. Variable manufacturing costs are $33,200 per year for this machine. Information on two alternative replacement machines follows.Cost Variable manufacturing costs per yearAlternative A$Alternative B116,000$113,00022,70011,000Calculate the total change in net income if Alternative A is adopted. (Input all amounts as positive values, except cash outflows and any negative total change in net income which should be indicated by a minus sign. Omit the "$" sign in your response.)Alternative A: Increase or (Decrease) in Net IncomeCost to buy new machineCash received to trade in old machineReduction in variable manufacturing costs$Total change in net income$Calculate the total change in net income if Alternative B is adopted. (Input all amounts as positive values, except cash outflows and any negative total change in net income which should be indicated by a minus sign. Omit the "$" sign in your response.)Alternative B: Increase or (Decrease) in Net IncomeCost to buy new machineCash received to trade in old machineReduction in variable manufacturing costs$Total change in net income$Santana Rey has found that her line of computer desks and chairs has become very popular and she is finding it hard to keep up with demand. She knows that she cannot fill all of her orders for both items, so she decides she must determine the optimal sales mix given the resources she has available. Information about the desks and chairs follows.Selling priceDesks$Chairs1,153.00$363.75per unitVariablecosts perunitContribution marginper unit600.00$Direct laborhours perunitExpecteddemand fornext quarter210.00553.00$153.754 hours3hours171 desks46chairsSantana has determined that she only has 777 direct labor hours available for the next quarter and wants to optimize her contribution margin given the limited number of direct labor hours available.Required: Determine the optimal sales mix and the contribution margin the business will earn at that sales mix. (Input all amounts as positive values. Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "$" sign in your response).DesksChairsTotalSalesVariable costs$$$Contribution margin$$$