Hallberg Ltd has two production methods: a labour-intensive production system and a machine-assisted manufacturing system. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs relating to the two methods are as follows:

	Labour intensive	Machine assisted
Selling price per unit	$195	$195
Direct material per unit	$33	$33
Direct labour per unit	$36	$ 15
Machine costs per unit	$ 6	$ 15
Fixed overhead	$ 1 500 000	$ 1 826 088

Required:

1) Complete the table below for each method (4 marks)

	Labour intensive	Machine assisted
Unit contribution margin
Breakeven point in sales units

2) If Hallberg Ltd decided to adopt the machine assisted method, how many units of the new product would need to be sold to make a profit of $200 000? (2 marks)

3) Calculate the annual sales volume at which Hallberg Ltd would be indifferent to which of the two manufacturing methods is chosen (2 marks)

(Type your responses directly into the template in the text box below.)

1)

	Labour intensive	Machine assisted
Contribution margin
Breakeven point in sales units

2) 3)