Question 3 8 points Alkamost 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 two methods are as follows: Capital Intensive Labor Intensive Direct Materials $0 per unit $0.00 per unit Direct Labor $2 per unit $5.00 per unit Variable Overhead $0 per unit $0.00 per unit Fixed Manuf. OH $0 $o Alkamost Company's market research department has recommended an introductory unit sales price of $10.00 The incremental selling expenses are estimated to be $0 annually plus . for each units sold, regardless of manufacturing method. Instructions: 1 Calculate the estimated break-even point in annual unit sales for the new product if the company uses a) Capital Intensive manufacturing method b) Labor-intensive manufacturing method 2 Compute contribution margin ratio and estimated break-even point in sales dollars if the company uses a) Capital Intensive manufacturing method b) Labor-intensive manufacturing method 3 What is the degree of operating leverage (general term) and how it is affected by the cost structure? Question 3 8 points Alkamost 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 two methods are as follows: Labor Intensive Direct Materials $0 per unit $0.00 per unit Direct Labor $2 per unit $5.00 per unit Variable Overhead $0 per unit $0.00 per unit Fixed Manuf. OH $156,949,500,000 $94,169,700,000 for each units Alkamost Company's market research department has recommended an introductory unit sales price of The incremental selling expenses are estimated to be $15,694,950,000 annually plus regardless of manufacturing method. Instructions: 1 Calculate the estimated break-even point in annual unit sales for the new product if the company uses a) Capital Intensive manufacturing method b) Labor intensive manufacturing method 2 Compute contribution margin ratio and estimated break even point in sales dollars if the company uses a) Capital Intensive manufacturing method b) Labor-intensive manufacturing method 3 What is the degree of operating leverage (general term) and how it is affected by the cost structure