E19-22 (similar to) Question Help PressPrint manufactures and sells 20,000 high-technology printing presses each year. The variable and fixed costs of rework and repair are as follows: E: (Click the icon to view the cost data.) PressPrint's current presses have a quality problem that causes variations in the shade of some colors. Its engineers suggest changing a key component in each press. (Click the icon to view the data on the new component.) Read the requirements. Requirement 1. Should PressPrint change to the new component? Show your calculations. Begin by selecting the formula and calculating the relevant cost amount. New component cost Presses sold Relevant costs 55 X 1 Data Table Variable Cost Fixed Cost Total Cost $ 83 $ 140 $ 223 Rework cost per hour Repair costs Customer support cost per hour 35 60 95 355 110 465 Transportation cost per load Warranty repair cost per hour 80 100 180 More Info The new component will cost $55 more than the old one. In the next year, however, PressPrint expects that with the new component it will (1) save 16,250 hours of rework, (2) save 1,000 hours of customer support, (3) move 200 fewer loads, (4) save 6,400 hours of warranty repairs, and (5) sell an additional 140 printing presses, for a total contribution margin of $700,000. PressPrint believes that even as it improves quality, it will not be able to save any of the fixed costs of rework or repair. PressPrint uses a 1-year time horizon for this decision because it plans to introduce a new press at the end of the year. i Requirements X 1. Should PressPrint change to the new component? Show your calculations. 2. Suppose the estimate of 140 additional printing presses sold is uncertain. What is the minimum number of additional printing presses that PressPrint needs to sell to justify adopting the new component? 3. What other factors should managers at PressPrint consider when making their decision about changing to a new component