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la Question 5 (8 points) Sum Manufacturing Company manufactures and sells a product called Happy. Recent cost analysis of manufacturing, selling, and administrative costs based
la Question 5 (8 points) Sum Manufacturing Company manufactures and sells a product called "Happy". Recent cost analysis of manufacturing, selling, and administrative costs based on monthly data has resulted in the following cost behavior: Total Monthly Fixed Costs Variable cost per Unit Manufacturing $315,000 Selling $178,500 Administrative $252,000 $6.00 $1.80 $0.70 The production capacity is 300,000 units per month. Currently company is manufacturing and selling 220,000 units of Happy at a selling price of $12 per unit. Company is considering automating the manufacturing process. This would reduce variable manufacturing costs per unit by $2.00 and will increase current monthly total fixed manufacturing costs by $250,000. By how much company's current profit will change if production is automated? Indicate Increase by "I" and Decrease by "D". Example of Answer: 40001 or 4000D (No space, comma, decimal point, or $ sign)
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