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LiChan LiChan
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7 years ago
The managers at Angelo's Pizza are considering replacing the pizza ovens used in their pizza parlor. The parlor has six pizza ovens that were purchased at the start of business 20 years ago. (Note: All numbers presented are for the six ovens as a whole.)

   Old   New
   Pizza Ovens   Pizza Ovens
   Cost     $ 90,000     $ 100,000
   Estimated useful life    15 years     10 years
   Estimated salvage value    $   5,000     $   20,000
   Current age    5 years     N/A
   Estimated current fair value    $ 30,000     N/A
   Annual operating cost    $ 12,000     $    6,000

REQUIRED:
Prepare a relevant cost schedule showing the benefit of keeping the old pizza ovens or buying new ones. Are there other factors that should be taken into consideration before making their decision?
Textbook 
Survey of Accounting: Making Sense of Business

Survey of Accounting: Making Sense of Business


Edition: 1st
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suryoyosuryoyo
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7 years ago
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LiChan Author
wrote...
7 years ago
Was looking for this exact answer, thanks
wrote...
7 years ago
Alright!
Thumbs up me, please!
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