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Question #6 116 points! Candice Corporation has decided to introduce a new product. The product can be manufactured using either a capital-intensive or labor-intensive facility.

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Question #6 116 points! Candice Corporation has decided to introduce a new product. The product can be manufactured using either a capital-intensive or labor-intensive facility. The manufacturing method will not affect the quality or sales of the Iroduct. The estimated manufacturing costs of the two methods are as follows: Capital intensive Labor intensive Variable manufacturing cost per unit $16.00 $20.00 Fixed manufacturing cost per year $244,000 $92,000 Fixed selling and administrative expenses per year $50,000 $50,000 Variable selling and administrative expense per unit $2.00 $2.00 III The marketing department has recommended an introductory selling price of $30 per unit for the new product. Required: a) Determine the breakeven point for each alternative separately. Which one is riskier? Why

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