Test II. Show your complete solution: A manufacturing firm has two production systems: labor-intensive and automated in making a new product. The estimated manufacturing cost of the two methods are as follows: Labor intensive system Automated system Direct material Direct labor Variable overhead Fixed overhead $9.50 11.75 7.20 $1,975,000 $8.45 10.25 4.50 $3,560,000 The company's introductory unit sales price for the new product is $45. Selling expenses are estimated to be $700,000 annually plus $3.00 for each unit sold. Ignore the income taxes. Test II. Show your complete solution: A manufacturing firm has two production systems: labor-intensive and automated in making a new product. The estimated manufacturing cost of the two methods are as follows: Labor intensive system Automated system Direct material Direct labor Variable overhead Fixed overhead $9.50 11.75 7.20 $1,975,000 $8.45 10.25 4.50 $3,560,000 The company's introductory unit sales price for the new product is $45. Selling expenses are estimated to be $700,000 annually plus $3.00 for each unit sold. Ignore the income taxes