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Austin Incorporated produces small-scale replicas of vintage automobiles for collectors and museums. Finished products are built on a 1/20 scale of originals. The firm's income
Austin Incorporated produces small-scale replicas of vintage automobiles for collectors and museums. Finished products are built on a 1/20 scale of originals. The firm's income statement showed the following: Revenues (1,690 units) $ 832,000 Variable expenses 477,700 Contribution margin $ 354,300 Fixed expenses 295,000 Operating income $ 59,300 An automated stamping machine has been developed that can efficiently produce body frames, hoods, and doors to the desired scale. If the machine is leased, fixed expenses will increase by $38,800 per year. The firm's production capacity will increase, which is expected to result in a 18% increase in sales volume. It is also estimated that labor costs of $27 per unit could be saved because less polishing and finishing
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