Please do not give solution in image format thanku Required informationPR 7-44 (Algo) Break-Even Analysis; Operating Leverage; New Manufacturing Environment (LO 7-1, 7-8,7-10)(The following information applies to the questions displayed below.)Celestial Products, Incorporated, has decided to introduce a new product, which can be manufactured by either acomputer-assisted manufacturing system or a labor-intensive production system. The manufacturing method will not affectthe quality of the product. The estimated manufacturing costs by the two methods are as follows:Computer-Assisted ManufacturingDirect materialDirect labor (OL denotes direct-labor hours)Variable overheadFixed overheadSysten0.5DL $24.000.50LH $15.00Labor-Intensive Production System$9.6015.6012.00$2,500,000$8.7012.00 0.BDLH $19.507.50 0.8DLH $15.00$4,260,000"These costs are directly traceable to the new product line. They would not be incurred if the new product were notproduced.The company's marketing research department has recommended an introductory unit sales price of $69.00. Sellingexpenses are estimated to be $870,000 annually plus $4,20 for each unit sold. (Ignore income taxes.) PR 7-44 (Algo) Part 1: Calculate the estimated break-even point in annual unit sales...Required:1. Calculate the estimated break-even point in annual unit sales of the new product if the company uses the (a) computer-assistedmanufacturing system; (b) labor-intensive production system.Note: Do not round intermediate calculations. Round your final answers to the nearest whole number.Computer-assisted manufacturing systemLabor-intensive production systemBreak-Even Pointunitsunits

Variable costs are those costs which changes along with change in activity level or sales volume.…

PR 7-44 (Algo) Part 1: Calculate the estimated break-even point in annual unit sales... Required: 1. Calculate the estimated break-even point in annual unit sales of the new product if the company uses the (a) computer-assisted manufacturing system; (b) labor-intensive production system. Note: Do not round intermediate calculations. Round your final answers to the nearest whole number. Computer-assisted manufacturing system Labor-intensive production system Break-Even Point units units

PR 7-44 (Algo) Part 1: Calculate the estimated break-even point in annual unit sales... Required: 1. Calculate the estimated break-even point in annual unit sales of the new product if the company uses the (a) computer-assisted manufacturing system; (b) labor-intensive production system. Note: Do not round intermediate calculations. Round your final answers to the nearest whole number. Computer-assisted manufacturing system Labor-intensive production system Break-Even Point units units

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 33P: Southward Company has implemented a JIT flexible manufacturing system. John Richins, controller of...

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Required information [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: Direct material Direct labor (DLH denotes direct-labor hours) Variable overhead Fixed overhead* Computer-Assisted Manufacturing System $ Volume 0.5DLH @ $25.50 0.5DLH @ $16.50 9.00 12.75 8.25 $4,410,000 units Labor-Intensive Production System $ 0.8DLH @ $21.00 0.8DLH @ $16.50 *These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. 9.90 16.80 13.20 $2,730,000 The company's marketing research department has recommended an introductory unit sales price of $75.00. Selling expenses are estimated to be $900,000…
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Question No. 1. A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below: For in-house manufacturing, using this information, determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it. Given: Annual fixed cost = P2,250,000.00 Variable cost per part = P7,000.00 For purchasing from supplier Purchase price per part = P8,000.00 Question No. 2. In relation to the previous question answer the following: If demand is forecast to be greater than 2,500 parts, should the firm make the part in-house or purchase it from a supplier? The marketing department forecasts that the upcoming year’s demand will be 2,500 units. A new supplier offers to make parts for P7,500.00 each. Should the company accept the offer? What is the maximum price per part the manufacturer should be willing to pay to the supplier if the forecast…
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Certain production equipment used by Dayton Mechanical has become obsolete relative to current technology. The company is considering whether it should keep or replace its existing equipment. To aid in this decision, the company’s controller gathered the following data: (See attached) c. What is the total dollar amount of all relevant costs to the equipment replacement decision. $______ d. What is the total dollar amount of the opportunity costs associated with the alternative of keeping the old equipment? $______
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Paxton company can produce a component of its product solve this question accounting
Making outsourcing decisions Cool Systems manufactures an optical switch that it uses in its final product. The switch has the following manufacturing costs per unit: Another company has offered to sell Cool Systems the switch for $15.00 per unit. If Cool Systems buys the switch from the outside supplier, the idle manufacturing facilities cannot be used for any other purpose, yet none of the fixed costs are avoidable.</p><p>Prepare an outsourcing analysis to determine whether Cool Systems should make or buy the switch.
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