Required: 1-a. Complete the following table showing the totals. (Enter all answe

Question

Required:
1-a. Complete the following table showing the totals. (Enter all answers in whole dollars.)

The following information appilies to the questions displayed below.J Beacon Company is considering autometing its production facility. The initial investment in automation would be $11.19 million, and the equipment has a usefull life of 10 years with a residual value of $1,090,000. The company will use straight-line depreciation. Beacon could expect a production increase of 42,000 units per year and a reduction of 20 percent in the labor cost per unit Current (no outomation) 88,000 units Production and sales volume 130,000 units Total Total Unit $ 91 Unit $91 Sales revenue Variable costs Direct materials Direct labor Variable manufecturing overhead 25 Total variable manufacturing costs Contribution morgin Fixed manufacturing costs $40 $45 $ 1160,000 $ 2,170,000 Net operating income PA11-2 Making Automation Decision LO 11-1, 11-2, 11-3, 11-5 Section Break

Explanation / Answer

Current total Sales revenue (88000*91)= 8008000 contribution margin (88000*40)= 3520000 net operating income (3,520,000-1,160,000) 2360000 Proposed per unit total Sales revenue (130,000*91) $91 11830000 Direct materials 17 Direct labor ( (25*80%) 20 Variable manufacturing overhead 9 total variable manufacturing costs 46 contribution margin $45 5850000 fixed manufacturing process 2,170,000 Net operating income 3,680,000

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