Budgeted selling and administrative costs:

Variable

Fixed

$$5$ per unit

$$2,196,000$

Expected sales activity: $24,400$ units at $$425$ per unit

Desired ending inventories: $10\%$ of sales

Assume this is the first year of operations for the Dubuque plant. During the year, the company had the following activity:

$\backslash$table$[[$Units produced,$28,060],[$Units sold,$26,560],[$Unit selling price,$$420$

Exercise $26\mathrm{.}2($Static$)$ Payback Period $($LO$26-1,$ LO$26-2,$ LO$26-3)$

Baylor Lumber Products is considering the purchase of a high$-$efficiency conveyor system. Two manufacturers have approached Baylor with proposals: $(1)$ Duke Industries and $(2)$ Wake Manufacturing. Regardless of which vendor Baylor chooses, the following incremental cash flows are expected to be realized:

$\backslash$table$[[,$Incremental Cash,Incremental Cash$],[$Year$,$Inflows,$0$ utflows$],[1,$$$29,000,$$$23,000$