Alternative Production Procedures and operating Leverage Assume Paper Mate is planning to introduce a new executive pen that can be manufactured using either a capital-intensive method or a labor-intensive method. The predicted manufacturing costs for each method are as follows: Capital Intensive Labor Intensive Direct materials per unit $5.00 $6.00 Direct labor per unit $15.00 $5.00 Variable manufacturing overhead per unit $7.00 $2.00 Fixed manufacturing overhead per year 140,000.00 $1,100,000.00 Paper Mate's market research department has recommended an introductory unit sales price of $33. The incremental selling costs are predicted to be $500,000 per year, plus $2 per unit sold. (a) Determine the annual break even point in units if Paper Mate uses the 1. Capital-intensive manufacturing method. 210,000 X units ee MBAMS 630 5th EX. doc MacBook Pro