1. Assume that Zynga and Big Fish both plan to introduce a new hand-held video game. Zynga plans to use a heavily automated production process to produce its product while Big Fish plans to use a labor-intensive production process. The following revenue and cost relationships are provided: Zynga Game Big Fish Game Selling Price Per Unit $150 $150 Variable Costs: Direct Materials 27 27 Direct Labor 7.50 30 Overhead 7.50 30 Selling & Admin 3 3 Fixed Costs: Overhead 600,000 240,000 Selling & Admin 135,000 135,000 Required: (a) Compute the contribution margin per unit for each company. (b) Prepare a contribution income statement for each company assuming each company sells 8,000 units. (c) Compute each firm's net income if the number of units sold increases by 10%. (d) Which firm will have more stable profits when sales change? Why?