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. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) Break-Even Point Computer-assisted manufacturing system Labor-intensive production system units units
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- Required information Problem 7-44 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, 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 System 8.10 Labor-Intensive Production System $ Direct material Direct labor (DLH denotes direct-labor hours) Variable overhead Fixed overhead* 9.00 13.20 9.60 $2,280,000 2$ 0.5DLH @ $21.00 0.5DLH @ $12.00 10.50 0.8DLH @ $16.50 6.00 0.8DLH @ $12.00 $3,960,000 *These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company's marketing research department has recommended an…GodoRequired 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…
- #25 (2) ANSWER ALL THE QUESTIONS AND SHOW YOUR SOLUTIONDomesticMozaic Inc. has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system (CAM) or a labor-intensive production system (LIP). The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: CAM System LIP System Direct Material $5.00 $5.60 Direct Labor (DLH) 0.5 DLH x $12 $6.00 0.8 DLH x $9 $7.20 Variable Overhead 0.5 DLH x $6 $3.00 0.8 DLH x $6 $4.80 Fixed Overhead* $2,440,000 $1,320,000 * These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company's marketing research department has recommended an introductory unit sales price of $30. Selling expenses are estimated to be $500,000 annually plus $2 for each unit sold. (Ignore 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-assisted…
- Mozaic Inc. has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system (CAM) or a labor-intensive production system (LIP). The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: www CAM System LIP System Direct Material $5.00 $5.60 Direct Labor (DLH) 0.5 DLH x $12 $6.00 0.8 DLH x $9 $7.20 Variable Overhead 0.5 DLH x $6 $3.00 0.8 DLH x $6 $4.80 Fixed Overhead* $2,440,000 $1,320,000 * These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company's marketing research department has recommended an introductory unit sales price of $30. Selling expenses are estimated to be $500,000 annually plus $2 for each unit sold. (Ignore income taxes.) Required: 1. Describe the circumstances under which the firm should employ each of the two manufacturing methods. 2. Identify some business…Accounting Evman Company has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system or a labour-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 system labour-intensive production system Direct Material $5.00 $5.60 Direct Labour .5DLH @ $12 $6.00 .8 DLH @ $9 $7.20 Variable Overhead .5 DLH @ $6 $3.00 .8 DLH @ $6 $4.80 Fixed Overhead * $2,440,000 $1,320,000 These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company’s marketing research department has recommended an introductory sales price of $30. Selling expenses are estimated to be $500,000 annually plus $2 for each unit…Accounting Evman Company has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system or a labour-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 system labour-intensive production system Direct Material $5.00 $5.60 Direct Labour .5DLH @ $12 $6.00 .8 DLH @ $9 $7.20 Variable Overhead .5 DLH @ $6 $3.00 .8 DLH @ $6 $4.80 Fixed Overhead * $2,440,000 $1,320,000 These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company’s marketing research department has recommended an introductory sales price of $30. Selling expenses are estimated to be $500,000 annually plus $2 for each unit…
- Crane Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows. Direct materials Direct labor Variable overhead Fixed manufacturing costs (a) Capital-Intensive $6.00 per unit $7.00 per unit $4.00 per unit $3,200,000 Crane' market research department has recommended an introductory unit sales price of $40.00. The selling expenses are estimated to be $622,000 annually plus $2.00 for each unit sold, regardless of manufacturing method. 1. Capital-intensive manufacturing method. 2. Labor-intensive manufacturing method. Break-even point in units Labor-Intensive $7.00 per unit $10.00 per unit $5.50 per unit Calculate the estimated break-even point in annual unit sales of the new product if Crane Company uses the: $2,028,500 Capital-Intensive Labor-IntensiveFunction: IF, SUM; Formula: Multiply; Cell Referencing BE5.5 - Using Excel to Evaluate a Make-Versus-Buy Decision PROBLEM Grunar Industries produces the component parts needed for its popular non-commercial-use drones. One of the key parts has become more costly to produce than first planned, however, so management is considering outsourcing that part. If the company decides not to manufacture this part, a portion of its fixed manufacturing overhead costs would continue. The costs to produce one such part internally and to purchase on part from the suppler are given here. Costs to produce internally Direct materials Direct labor Variable manufacturing overhead $ 2.80 1.70 0.50 Fixed manufacturing overhead 2.00 Cost to purchase from a supplier 6.25 Portion of fixed manufacturing cost to continue 80% Student Work Area Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work…Refer to Exercise 12.14. Suppose that for 20x2, Sanford, Inc., has chosen suppliers that provide higher-quality parts and redesigned its plant layout to reduce material movement. Additionally, Sanford implemented a new setup procedure and provided training for its purchasing agents. As a consequence, less setup time is required and fewer purchasing mistakes are made. At the end of 20x2, the information shown on page 680 is provided. Required: 1. Prepare a report that compares the non-value-added costs for 20x2 with those of 20x1. 2. What is the role of activity reduction for non-value-added activities? For value-added activities? 3. Comment on the value of a trend report.