[The following information applies to the questions displayed below.] Beacon Company is considering...

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[The following information applies to the questions displayed below.]
Beacon Company is considering automating its production facility. The initial investment in automation would be $12.89 million, and the equipment has a useful life of 10 years with a residual value of $1,190,000. The company will use straightline depreciation. Beacon could expect a production increase of 38,000 units per year and a reduction of 20 percent in the labor cost per unit.
\table[[\table[[Production and sales volume],[Sales revenue]],\table[[Current (no automation)],[84,000 units]],\table[[Proposed (automation)],[122,000 units]]],[Per Unit,Total,Per Unit,Total],[$91,$ ?,$91,$ ?],[\table[[Variable costs],[Direct materials]],,,,],[\table[[Direct materials],[Direct labor]],$ 18,,$ 18,],[Variable manufacturinq overhead,20,,?,t],[\table[[Variable manufacturing overhead],[Total variable manufacturing costs]],9,:,9.,,],[Contribution margin,\table[[47],[+11]],,?,],[Fixed manufacturing costs,$44,??1,230,000,$48,2,180,000
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