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Corrigan Enterprises is studying the acquisition of two electrical component insertion systems for producing its...

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Accounting

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Corrigan Enterprises is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow. Model number 6754 : Variable costs, $16.00 per unit Annual fixed costs, $986,300 Model number 4399: Variable costs, $11.80 per unit Annual fixed costs, $1,114,300 Corrigan's selling price is $66 per unit for the universal gismo, which is subject to a 15 percent sales commission. (In the following requirements, ignore income taxes.) 3. Assume Model 4399 requires the purchase of additional equipment that is not reflected in the preceding figures. The equipment will cost $420,000 and will be depreciated over a five-year life by the straight-line method. How many units must Corrigan sell to earn $971,000 of income if Model 4399 is selected? As in requirement 2 , sales and production are expected to average 63,400 units per year. Note: Do not round intermediate calculations and round your final answer up to nearest whole number

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