Wood Furniture, Inc., builds high-quality wood desks. Management of the company is considering going from a labor-intensive process of building desks to an automated process that requires expensive machinery and equipment. If the company moves to an automated process, variable production costs will decrease (direct materials, direct labor, and variable, manufacturing overhead) due to improved efficiency, and fixed production costs will increase as a result of additional depreciation costs. The costs predicted for the coming year are shown. The selling price is expected to be $900 per unit for both processes. Labor-Intensive Process Automated Process Variable cost of goods sold S490 per unit $290 per unit Fixed cost of goods sold (annual) $1,000,000 $2,600,000 Variable selling and administrative S10 per unit $10 per unit Fixed selling and admin. (annual) $400,000 $400,000 Required: a. Calculate the break-even point in units assuming that (1) the labor- intensive process is used, and (2) the automated process is used. b. Explain why there is such a significant difference in break-even points between the labor-intensive process and the automated process. c. Assume Wood Furniture, Inc., expects to produce and sell 8,000 units this coming year and is certain sales will grow by at least 10 percent per year in future years. Calculate the expected operating profit assuming that (1) the labor intensive process is used, and (2) the automated process is used. d. Using requirement c as a guide, explain whether management should stay with the labor-intensive process or switch to an automated process