Beacon company is considering automating its production facility. The initial investment in automation would be 15 million dollars, and the equipment has a useful life of 10 years with a residual value of $500,000....

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Course Mate CH11 Homework X C Chea ezt Search isited my.utrgv.edu ALGEBRA Login Search everythin Required Information Beacon Company is considering automating its production facllity The Intal tment in automation would be $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straight-line depreciatuion. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 80,000 units Proposed (automation) Production and sales volume 120,000 units Per Unit Per Total Total Unit Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead $ 18 25 10 53 $ 37 $18 10 Total variable manufacturing costs Contribution margin Fixed manufacturing costs $42 ? $1.250,000 $2.350.000 Net operating income 1080 30 29... Chapter 10 test bank o... Microsoft Study Notes Word