Expand Your Critical Thinking 18-1 Creative Ideas Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows. Capital-Intensive Labor-Intensive Direct materials $4 per unit $4.50 per unit Direct labor $5 per unit $7.00 per unit Variable overhead $3 per unit $4.00 per unit Fixed manufacturing costs $2,171,000 $1,333,000 Creative Ideas market research department has recommended an introductory unit sales price of $28. The incremental selling expenses are estimated to be $432,000 annually plus $2 for each unit sold, regardless of manufacturing method. With the class divided into groups, answer the following. (a) Calculate the estimated break-even point in annual unit sales of the new product if Creative Ideas Company uses the: (Round answers to 0 decimal places, e.g. 5,275.) (1) Capital-intensive manufacturing method. (2) Labor-intensive manufacturing method. Capital-Intensive Labor-Intensive Break-even point in units (b) Determine the annual unit sales volume at which Creative Ideas Company would be indifferent between the two manufacturing methods. (Round answer to 0 decimal places, e.g. 5,275.)