Beacon Company is considering automating its production facility. The initial investment in automation would be $ million, and the equipment has a useful life of years with a residual value of $ The company will use straightline depreciation. Beacon could expect a production increase of units per year and a reduction of percent in the labor cost per unit.
tabletableProduction and sales volumeSales revenuetableCurrent no automation unitstableProposed automation unitsTotal,Per Unit,Total$$$Variable costs,,,,tableDirect materialsDirect labor$ $ tableDirect laborVariable manufacturing overheadtabletableTotal variable manufacturing costs,tableContribution marginFixed manufacturing costs$tabletable
