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Crane Company has decided to introduce a new product that can be manufactured by either a capital-intensive method or a labour-intensive method. The manufacturing method
Crane Company has decided to introduce a new product that can be manufactured by either a capital-intensive method or a labour-intensive method. The manufacturing method will not affect he quality of the product. The estimated manufacturing costs under the two methods are as follows: Crane's market research department has recommended an introductory unit sales price of $64. The incremental selling expenses are estimated to be $522,080 annually, plus $4 for each unit old, regardless of the manufacturing method. Calculate the estimated break-even point in annual unit sales of the new product if Crane Company uses (1) the capital-intensive manufacturing method, or (2) the labour-intensive manufacturing method. Question Part Score Determine the annual unit sales volume at which there would be no difference between methods
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