Answer Happy

C11 Applications 2 Part 2 of 5 4 points Skoped eBook Print References Mc Graw Hali Production and sales volume Sales revenue Variable costs Direct naterials $ 17 Direct labor 15 Variable manufacturing overhead, 11 Total variable manufacturing 43 costs $ 54 Contribution margin Fixed manufacturing costs Met operating income [The following information applies to the questions displayed below] Beacon Company is considering automating its production facility. The initial investment in automation would be $6.81 million, and the equipment has a useful life of 5 years with a residual value of $1,160,000. The company will use straight-line depreciation. Beacon could expect a production increase of 37,000 units per year and a reduction of 20 percent in the labor cost per unit. % Seved Per Unit $97 < Prev Current (ho automation) 72,000 units Total $7 7 $1,100,000 8 2 3 4 5 Proposed (automation) 109,000 units Ter Unit 8.97 $ 17 11 $57 2. Determine the project's accounting rate of return. (Round your answer to 2 decimal places.) Accounting rate of return of 7 Total $7 7 $2,150,000 2 Help Next> Save & Exit S Check my w