Print Product manufactures and sells 25,000 high-technology printing presses each year. The variable and fixed costs of rework and repair are as follows: : (Click the icon to view the cost data.) Print Product'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 Print Product change to the new component? Show your calculations Begin by selecting the formula and calculating the relevant cost amount New component cost Presses sold 25.000 Relevant costs 1,750,000 $ 70 $ Select the formula you will use to calculate the relevant benefits of the quality items. Relevant benefits of quality items Variable cost per hour/load Hours/loads saved = Savings on rework costs Savings in customer support costs Savings in transportation costs Savings in warranty repair costs = Choose from any list or enter any number in the input fields and then click Check Answer. parts Clear All Check Answer remaining Data Table Variable Cost Fixed Cost Total Cost Rework cost per hour $ 77 $ 150 $ 227 Repair costs Customer support cost per hour 37 70 Transportation cost per load 370 105 475 Warranty repair cost per hour 87 107 100 187 Print Done More Info x The new component will cost $70 more than the old one. In the next year, however, Print Product expects that with the new component it will (1) save 15,000 hours of rework, (2) save 750 hours of customer support, (3) move 275 fewer loads, (4) save 5,200 hours of warranty repairs, and (5) sell an additional 150 printing presses, for a total contribution margin of $600,000. Print Product believes that even as it improves quality, it will not be able to save any of the fixed costs of rework or repair. Print Product uses a 1-year time horizon for this decision because it plans to introduce a new press at the end of the year. Print Done at i Requirements st 1. Should Print Product change to the new component? Show your calculations. 2. Suppose the estimate of 150 additional printing presses sold is uncertain. What is the minimum number of additional printing presses that Print Product needs to sell to justify adopting the new component? 3. What other factors should managers at Print Product consider when making their decision about changing to a new component? LILILI Print Done