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5 Required information PA11-2 (Algo) Making Automation Decision (LO 11-1, 11-2, 11-3, 11-5) (The following information a
Posted: Tue Apr 26, 2022 10:06 am
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- 5 Required Information Pa11 2 Algo Making Automation Decision Lo 11 1 11 2 11 3 11 5 The Following Information A 1 (38.02 KiB) Viewed 45 times
5 Required information PA11-2 (Algo) Making Automation Decision (LO 11-1, 11-2, 11-3, 11-5) (The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $10.36 million and the equipment has a useful life of 8 years with a residual value of $1,080,000. The company will use straight- line depreciation Beacon could expect a production increase of 49,000 units per year and a reduction of 20 percent in the labor cost per unit. Proposed (automation) 125,000 unito Per Unit Total $ Current (no automation) 76,000 units Per Production and sales volume Unit Total Sales revenue $ 99 Variable conta Direct materials $ 19 Direct labor 30 Variable manufacturing overhead Total variable manufacturing 58 costa Contribution margin $ 41 Fixed manufacturing costa $1,120,000 Net operating income 7 $.17 2 11 7 $ 47 2 $ 2,270,000 2 PA11-2 Part 3 3. Determine the project's payback period. (Round your answer to 2 decimal places.) Payback period years Penu