100000 -50000 50000 25000 30000 5000 8000 11000 9000 4500 4 4 36000 18000 Problem 1 Problem 2 Direct or Indirect? Salary of manufacturing supervisor Wages of manufacturing worker Telephone costs Rent Material used in production Old Machine Original cost Accumulated depreciation Market value (now) Book value Salvage value (in 5 years) Annual depreciation expense Times number of years New machine Required: GH Company is trying to decide whether to replace a current piece of machinery with a new machine.

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100000 -50000 50000 25000 30000 5000 8000 11000 9000 4500 4 4 36000 18000 Problem 1 Problem 2 Direct or Indirect? Salary of manufacturing supervisor Wages of manufacturing worker Telephone costs Rent Material used in production Old Machine Original cost Accumulated depreciation Market value (now) Book value Salvage value (in 5 years) Annual depreciation expense Times number of years New machine Required: GH Company is trying to decide whether to replace a current piece of machinery with a new machine. Using the below data, determine the relevant costs of the old machine and the new machine. Should GH Company purchase the new machine? Total operating expenses Per year Operating expenses Required: Identify each of the following as either a direct or indirect cost. ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

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