Calculate the estimated break-even point in annual unit sales of the new product if Crane Company uses (1) the capital-intensive manufacturing method, or (2) the labour-intensivemanufacturing method.Break-even pointQuestion Part Score(1)Capital-intensive manufacturing methodAnnual sales volumeunitsDetermine the annual unit sales volume at which there would be no difference between methods.(2)Labour-intensive manufacturing methodunitsunits Crane Company has decided to introduce a new product that can be manufactured by either a capital-intensive method or a labour-intensive method. The manufacturing method will not affectthe quality of the product. The estimated manufacturing costs under the two methods are as follows:Direct materialsDirect labourVariable overheadFixed manufacturing costsCapital-Intensive$10.00 per unit$12.00 per unit$6.00 per unit$2,624,960Labour-Intensive$11.00 per unit$16.00 per unit$9.00 per unit$1,612,000Crane's market research department has recommended an introductory unit sales price of $64. The incremental selling expenses are estimated to be $522,080 annually, plus $4 for each unitsold, regardless of the manufacturing method.

BREAKEVEN POINT Break Even means the volume of production or sales where there is no profit or…

Calculate the estimated break-even point in annual unit sales of the new product if Crane Company uses (1) the capital-intensive manufacturing method, or (2) the labour-intensive manufacturing method. Break-even point Question Part Score (1) Capital-intensive manufacturing method Annual sales volume units Determine the annual unit sales volume at which there would be no difference between methods. (2) Labour-intensive manufacturing method units units

Calculate the estimated break-even point in annual unit sales of the new product if Crane Company uses (1) the capital-intensive manufacturing method, or (2) the labour-intensive manufacturing method. Break-even point Question Part Score (1) Capital-intensive manufacturing method Annual sales volume units Determine the annual unit sales volume at which there would be no difference between methods. (2) Labour-intensive manufacturing method units units

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Pharoah Company has a unit selling price of $576, variable costs per unit of $324, and fixed costs of $183,456. Compute the break-even point in units using (a) the mathematical equation and (b) unit contribution margin. Break-even point (a) Mathematical Equation (b) Unit contribution margin units units
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Use the following information to answer the question: Selling price per unit $200 Variable manufacturing costs per unit $ 50 Fixed manufacturing costs per unit $ 60 Variable selling costs per unit $ 40 Fixed selling costs per unit $ 20 Expected production and sales 800 units Contribution margin per unit is:
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