Select Page

Hello,

I have attached an excel spreedsheet with three questions to the problem. Please let me know if you can assit me in finding the solution as a lesson.

Document Preview:

Capital Intensive Method Labor Intensive Method Show your work with the appropriate calculations in the cells a) Calculate the estimated break-even point in annual unit sales of the new product if the Sanchez Company uses the: b) Determine annual unit sales volume at which the Sanchez Company would be indifferent between the two manufacturing methods c) Explain the circumstance under which the Sanchez Company should employ each of the two manufacturing methods The Sanchez Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: Capital-Intensive Direct Materials 5\$ per unit Direct Labor 6\$ per unit Variable Overhead \$3 per unit Fixed Manufacturing Costs \$2,508,000 Labor Intensive Direct Materials 5.5\$ per unit Direct Labor 8\$ per unit Variable Overhead \$4.5 per unit Fixed Manufacturing Costs \$1,538,000 The Martinez Company’s market research department has recommended an introductory unit sales price of \$30. The incremental selling expenses are estimated to be \$502,000 annually plus \$2 for each unit sold, regardless of manufacturing method ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Attachments: