$3.$  Calculate the annual unit sales volume at which ABC Company would be indifferent between the two manufacturing methods. Use this info: Capital$-$intensive:

Direct material: $$5/$unit

Direct labor: $$6/$unit

Manufacturing overhead $($variable$)$: $$3/$unit

Manufacturing overhead $($fixed$)$: $$2,500,000$

Labor$-$intensive:

Direct material: $$5/$unit

Direct labor: $$9/$unit

Manufacturing overhead $($variable$)$: $$2/$unit

Manufacturing overhead $($fixed$)$: $$1,500,000$

Unit sales price $($per unit$)$: $$32$

Selling expenses $($fixed$)$: $$500,000$ annually

Selling expenses $($variable$)$: $$2/$unit

 

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