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Beacon Company is considering automating its production facility. The initial investment in automation would be...

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Accounting

Beacon Company is considering automating its production facility. The initial investment in automation would be $6.61 million, and the equipment has a useful life of 5 years with a residual value of $1,160,000. The company will use straightline depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit.
\table[[\table[[Production and sales volume],[Sales revenue],[Variable costs]],\table[[Current (no automation)],[78,000 units]],\table[[Proposed (automation)],[118,000 units]]],[Per Unit,Total,Per Unit,Total],[$99,$?,$99,$ ?],[Direct materials,$17,,,],[Direct labor,25,,\table[[,,,,],[Variable manufacturing overhead,10,,10,],[\table[[Total variable manufacturing costs],[Contribution margin]],52,,?,],[Fixed manufacturing costs,$47,\table[[1,100,00
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