Sheridan 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		$4.60	per unit		$5.10	per unit
Direct labor		$5.52	per unit		$7.52	per unit
Variable overhead		$2.76	per unit		$4.26	per unit
Fixed manufacturing costs		$2,321,120			$1,407,264

Sheridan market research department has recommended an introductory unit sales price of $29.44. The incremental selling expenses are estimated to be $458,016 annually plus $1.84 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 Sheridan Company uses the:

1.		Capital-intensive manufacturing method.
2.		Labor-intensive manufacturing method.

		Capital-Intensive		Labor-Intensive
Break-even point in units		enter the break even point for capital intensive in units