I would like some help with this. the problem and question is in the attached file. thank you

CASE-1 Reynolds Manufacturing Company by Khursheed Omer Reynolds Manufacturing Company manufactures a product that is processed in three sequential departments. Lately, the competition in the industry has become very intense as many foreignmanufacturers have introduced their product in the intern ational market at lower prices. Management at Reynoldsis consideringprocess improvement . They have been told by a sales representative of a manufacturing equipment company that introduction of state-of-art equipment and several other measures in processing department #1 can significantly reduce the per unit cost of processing . This wouldallow competitive pricing of their finished product. Cost reduction will be accomplished by eliminating material wastage and eliminating direct labor cost (the new equipment willperform many functions that previously required manual labor).The new system will cost $,320,000 6 and will have a useful life of ten years. Accordingly, new equip ment and other measures were introduced on a trial basis. Management iseager to find out ifthis changewould yield the desired results . At the end of the trial month, the per unit cost figuresand the following partial cost of production report for Process #1prepared by the companyaccountantwas made available. ...... continued on ne Beginning Work in Process 60,000units (100% Material, 75% Conversion) Units Started during the month Units to account for 40,000units ----------------100,000 units =========== EQUIVALENT UNITS Direct Material Conversion Total number of units completed 85,000 units 85,000 85,000 Ending Work in Process 15,000 units 15,000 12,000 (100% Material,80%Conversion) ------------------------------------------------------------------Units accounted for 100,000 100,000 97,000 =========================================== Direct materials Cost of Beginning Work in Process: $ 300,000 Cost incurred this month: Total Cost Divided by Equivalentunits = Conversion $ 450,000 Total $ 750,000 $ 160,000 $ 116,000 $ 276,000 ------------------------------------------------------------------------$ 460,000 $ 566,000 $1,026,000 100,000 97,000 $ 4.60 $ 5.84 $ 10.44 The Company CEO and the foreman in charge of the departmentnot arevery enthused by the performance of the new system as they seeno significant difference in pe r unit cost of processing. They arewondering if such a huge investment is justified when the company is under intensive competitive pressure.However, the equipment sales representative insists that other companies who have purchased this system have experienced significant reduction in the cost of processing.You are amanagementconsultant retained by the company.You have been asked to look into this issue and make a recommendation to the CEO of the company