problem: Plainfield Bakers, manufactures & sells a popular line of fat-free cookies under the name Aunt May’s Cookies. The process Plainfield uses to produce the cookies is labor-intensive; it relies heavily on direct labor. Last year Plainfield sold 300,000 dozen cookies at $2.50 per dozen. Variable Costs at this level of production totaled dollar 1.50 per dozen, & fixed costs for the year totaled $150,000.
 Make a contribution-margin income statement for last year.
 Compute firm’s contribution-margin ratio & breakeven point in sales units for last year.
 Plainfield’s direct labor rate is increasing up $0.40 a dozen next year. Suppose that the selling price stays at $2.50 a dozen, compute next year’s contribution margin and breakeven point in sales units.
 Plainfield’s management is thinking about automation the production process, a change that would reduce variable costs by $0.60 a dozen but would raise fixed costs by $150,000 automation a year. If the firm undertakes the automation project, how would its contribution margin and breakeven point in sales units affected?
 Suppose that Plainfield does go ahead with the automation project , how many dozen cookies would the company have to sell dollar 2.50 a dozen to earn the same income it earned last year?
 What are some of the nonfinancial aspects of the automation decision that Plainfield’s management should consider when deciding whether to embark on the automation project or not?