Current (no automation) 72,000 units Proposed (automation) 107,000 units Per Per Production and sales volume Unit Total Unit Sales revenue Variable costs Direct materials Direct labor $ 95 $ ? $ 95 Total $ ? $ 19 $ 19 25 ? Variable manufacturing overhead Total variable manufacturing 12 12 56 ? costs Contribution margin $ 39 ? $ 44 ? Fixed manufacturing costs $ 1,220,000 $ 2,270,000 Net operating income ? ? Required: 1-a. Complete the following table showing the totals. (Enter your answers in whole dollars, not in millions.) ✓ Answer is complete and correct. Current (no automation) Proposed (automation) 72,000 units 107,000 units Production and Sales Volume Per Unit Total Per Unit Total Sales revenue $ 95 $ 6,840,000 $ 95 $10,165,000 Variable costs Direct materials $ 19 $ 19 Direct labor 25 20 Variable manufacturing overhead 12 12 Total variable manufacturing costs 56 51 Contribution margin $ 39 2,808,000 $ 44 4,708,000 Fixed manufacturing costs $ 1,220,000 $ 2,270,000 Net operating income $ 1,588,000 $ 2,438,000

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Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.