The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $8.23 million, and the equipment has a useful life of 7 years with a residual value of $1,090,000. The company will use straight line depreciation. Beacon could expect a production increase of 47,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 82,000 units Per Proposed (automation) 129,000 units Per Unit Total $ 95 Total Unit $95 $ 19 15 Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income $ 1,080,000 $2,200,000 search 1-b. Does Beacon Company favor automation? Yes No search _ 3 0 e