ACCOUNTING-The incremental costs are simply B – A (or A – B) as shown in column 4.

ABIncremental Costs (B – A)Direct materials$10,000$10,000000$0Direct labor$10Direct labor,000$15,0005,000The incremental costs are simply B – A (or A – B) as shown in column 4. Here is a question for you. Ron Jones is considering replacing an old machine, which he purchased for $15,000 three years ago, with some labor saving equipment. The old machine is being depreciated at $1,500 a year. The following alternative equip options are available for consideration.Machine A: The purchase price of machine A is $25,000 and a yearly cash operating costs are $5,000.Machine B: The purchase price of machine B is $28,000 and a yearly cash operating costs are $4,500.1)What are the incremental costs, if any, in this alternative choice situation?

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