Required information PA11-2 (Algo) Making Automation Decision (LO 11-1, 11-2, 11-3, 11-5) (The following information applies to the questions displayed below.) Beacon Company is considering automating its production facility. The initial investment in automation would be $10.08 million, and the equipment has a useful life of 8 years with a residual value of $1,040,000. The company will use straight- line depreciation. Beacon could expect a production increase of 35,000 units per year and a reduction of 20 percent in the labor cost per unit. current (no autonation) 1,000 units Proposed (automation) 116,000 units Per Unit Per Production and sales volune Sales revenue Variable costa birect materials Direct labor Variable manufacturing overhead Total variable manufacturing Unit Total $7 Total $ 95 $ 95 $17 20 $ 17 12 12 49 costs Contribution margin Fixed manutacturing costs $ 46 $ 50 $ 1,210,000 $2,270,000 Net operating income

Required information PA11-2 (Algo) Making Automation Decision (LO 11-1, 11-2, 11-3, 11-5) (The following information applies to the questions displayed below.) Beacon Company is considering automating its production facility. The initial investment in automation would be $10.08 million, and the equipment has a useful life of 8 years with a residual value of $1,040,000. The company will use straight- line depreciation. Beacon could expect a production increase of 35,000 units per year and a reduction of 20 percent in the labor cost per unit. current (no autonation) 1,000 units Proposed (automation) 116,000 units Per Unit Per Production and sales volune Sales revenue Variable costa birect materials Direct labor Variable manufacturing overhead Total variable manufacturing Unit Total $7 Total $ 95 $ 95 $17 20 $ 17 12 12 49 costs Contribution margin Fixed manutacturing costs $ 46 $ 50 $ 1,210,000 $2,270,000 Net operating income

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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am. 137.