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(The following information applies to the questions displayed below Celestial Products, Inc. has decided to introduce a new product, which can be manufactured by either
(The following information applies to the questions displayed below Celestial Products, Inc. has decided to introduce a new product, which can be manufactured by either a computer- assisted manufacturing system or a labor-intensive production system. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: Computer-Assisted Manufacturing Sys Labor-Intensive tem tion Sys Direct material 8.00 10.25 s.75 3,910,000 8-90 12.80 9.20 S2,230,000 Direct labor (DLH denotes .SDLH direct-labor hours) Variable overhead Fixed overbead 20.50 $16.00 0.5DLB .8DE8 $11.50 11.50 These costs are directy traceable to the new product line. They would not be incurredif the new product were not produced The company's marketing research department has recommended an introductory unit sales price of $55.00. Selling are estimated to be $800,000 annually plus $3.50 for each unit sold (Iignore income taxes Required: 1. Calculate the estimated break-even point in annual unit sales of the new product if the company uses the (a) computer-assist manufacturing system; (b) labor-intensive production system. (Do not rou to the nearest whole number) labor-intensive production sys intermediate calculations. Round your final answers Prev 4 S of 5 EI Next > 3 0
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