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Sunland 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
Sunland 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 $4.70 per unit $5.20 per unit Direct labor $5.64 per unit $7.64 per unit Variable overhead $2.82 per unit $4.32 per unit Fixed manufacturing costs $2,371,600 $1,427,920 Sunland' market research department has recommended an introductory unit sales price of $30.08. The incremental selling expenses are estimated to be $470,960 annually plus $1.88 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 Sunland Company uses the: 1. Capital-intensive manufacturing method. 2. Labor-intensive manufacturing method. Capital-Intensive Labor-Intensive Break-even point in units e Textbook and Media Save for Later Attempts: 0 of 5 used Submit
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