Question

tice Exercises EE9-1 p 369 PE9-1A Lease or sell Claxon Company owns a machine with a cost of $305,000 and of $65,000 that can be sold for $262,000, less a 5% sales commission. A machine can be leased by Claxon Company for end of which there is no residual value. In addition, the repair, insurance, a tax expense that would be incurred by Claxon Company on the chine $21,600 over the three years. Prepare a differential analysis on January Claxon Company should lease (Alternative 1) or sell (Alternative 2) the ma accumulated depreciation the three years for a total of $272,000, at the nd property would total 12 as to whether Alternati EE9-1 p 369 PE 9-1B Timberlak Lease or sell OBJ.1 e Company owns equipment with a cost of $165,000 and accumulated deprecia- tion of $60,000 that can be old for $82,000, less a 6% sales commission. Alternatively, the equipment can be leased by Timberlake Company for five y the end of which there is no re ears for a total of $84,600, at sidual value. In addition, the repair, insurance, and property tax expense that would be incurred by Timberlake Company on the equipment would total $7,950 over the five years. Prepare a differential analysis on March 23 as to whether Timberlake Company should lease (Alternative ¡) or sell (Alternative 2) the equipment. EE 9-2 p 371 PE 9-2A Discontinue a segment OBJ.1 Product TS-20 has revenue of $102,000, variable cost of goods sold of $52,500, variable selling expenses of $21,500, and fixed costs of $35,000, creating a loss from operations of $7,000. Prepare a differential analysis as of September 12 to determine if Product TS-20 should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. Discontinue a segment OBJ. 1 PE 9-2B Product B has revenue of $39,500, variable cost of goods sold of $25,500, variable selling expenses of $16,500, and fixed costs of $15,000, creating a loss from operations of $17,500. Prepare a differential analysis as of May 9 to determine if Product B should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. EE9-2 p 371 OBJ. 1 EE9-3 p 372 PE 9-3A Make or buy A restaurant bakes its own bread for a cost of $165 per unit (100 loa fixed costs of $43 per unit. A proposal is offered to purchase bread from source for $110 per unit, plus $15 per, unit for delivery. Prepare a differ dated August 16 to determine whether the company should make (Alternati (Alternative 2) the bread, assuming fixed costs are unaffected by the decision. ves), including ve 1) or buy

Answer 1