Jacobean Creek Corporation has provided the following data for last year:

For the current year, Jacobean Creek believes that although sales volume will remain constant, the contribution margin per unit can be increased by 20%)and total fixed cost can be reduced by 10%.

a. Calculate the operating profit for last year and the current year.

b. What is thyes increase in profit between the two years?

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Sales Sales price 5,000 units $80 per unit Variable cost Fixed cost $55 per unit $25,000