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Pharoah 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.
Pharoah 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 $4.50 per unit $5.00 per unit Direct labor $5.40 per unit $7.40 per unit Variable overhead $2.70 per unit $4.20 per unit Fixed manufacturing costs $2,270,640 $1,416,400 Pharoah market research department has recommended an introductory unit sales price of $28.80. The incremental selling expenses are estimated to be $445,200 annually plus $1.80 for each unit sold, regardless of manufacturing method Answer the following (a) Calculate the estimated break-even point in annual unit sales of the new product if Pharoah Company uses the: Activate Go to Sett Comtalantan manufacturing mothed (a) Calculate the estimated break-even point in annual unit sales of the new product if Pharoah Company uses the: 1. Capital-intensive manufacturing method. 2 Labor-intensive manufacturing method. Capital-Intensive Labor-Intensive Break-even point in units Save for Later Attomat
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