Vikrambahi Required information[The following information applies to the questions displayed below.]Beacon Company is considering automating its production facility. The initial investment in automation would be $7.40million, and the equipment has a useful life of 6 years with a residual value of $1,040,000. The company will use straight-line depreciation. Beacon could expect a production increase of 36,000 units per year and a reduction of 20 percent inthe labor cost per unit.Current (noautomation)77,000 unitsProposed(automation)113,000 unitsPerPerProduction and sales volumeUnitTotalUnitTotalSales revenue$ 93$ ?$ 93$ ?Variable costs.Direct materials$ 16$ 16Direct labor25?Variable manufacturing overhead10Total variable manufacturing costs5110?Contribution margin$ 42?$ 47?Fixed manufacturing costs$ 1,240,000$ 2,330,000Net operating income??3. Determine the project's payback period. (Round your answer to 2 decimal places.)Payback periodyears

Current (No automation) 77,000 unitsProposed ( automation) 113,000 unitsProduction & Sales…

Required information [The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $7.40 million, and the equipment has a useful life of 6 years with a residual value of $1,040,000. The company will use straight- line depreciation. Beacon could expect a production increase of 36,000 units per year and a reduction of 20 percent in the labor cost per unit. Production and sales volume Sales revenue Current (no automation) 77,000 units Per Unit Total $93 $? Proposed (automation) 113,000 units Total Per Unit $93