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Beacon Company is considering automating its production facility. The initial investment in automation would be $$8\mathrm{.}04$ million, and the equipment has a useful life of $7$ years with a residual value of $$1,040,000.$ The company will use straightline depreciation. Beacon could expect a production increase of $37\mathrm{.}000$ units per year and a reduction of $20$ percent in the labor cost per unit.

$\backslash$table$[[,\backslash$table$[[$Current $($no$]],\backslash$table$[[$automation$)83,000],[$units$]],\backslash$table$[[$Proposed $($au$]],$ion$)120,000],[$Production and sales volume,Per Unit,Total,Per Unit,Total$],[$Sales revenue,$$100,$$$?,$$$100,$$$?],[$Variable costs,,,,$],[$Direct materials,$$16,,$$$16,],[$Direct labor,$15,,?,],[$Variable manufacturing overhead,$8,,8,],[$Total variable manufacturing costs,$39,,?,],[$Contribution margin,$$61,?,$$$64,?],[$Fixed manufacturing costs,,$1,100,900,,2,240,000$