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100000-500005000025000
300005000
8000110009000
45004
436000
18000Problem 1
Problem 2
Direct or Indirect?
(20 points)
(30 points)
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.
100000-500005000025000
300005000
8000110009000
45004
436000
18000Problem 1
Problem 2
Direct or Indirect?
(20 points)
(30 points)
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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