Using Incremental Analysis
SE 2. Pices Corporation has assembled the following information related to the purchase of a new automated postage machine:
|
Posen Machine |
Value Machine |
|
|
Increase in revenue |
$44,200 |
$49,300 |
|
Increase in annual operating costs |
||
|
Direct materials |
12,200 |
12,200 |
|
Direct labor |
10,200 |
10,600 |
|
Variable overhead |
24,500 |
26,900 |
|
Fixed overhead (including depreciation) |
12,400 |
12,400 |
Using incremental analysis and only relevant information, compute the difference in favor of the Value machine.