AD * Auto Zoom, G ANDERSON COMPANY Contribution Income Statement For Month of October 2017 Sales (10,000 units $40) Less variable costs $400,000 Direct labor (10,000 units X $14) seling and administrative (10,000 units $5)-. Less fixed costs 140,000 60,000 50,000 0,000) 100,000 Contribution margin (10,000 units $10) Factory overhead 50,000 60,000 (110,000) $ (10,000) Net income (loss) Required Determine the effect of each of the following independent situations on monthly profit a. Purchasing automated assembly equipment, which should reduce direct labor costs by $5 per unit and increase variable overhead costs by $2 per unit and fixed factory overbead by $22,000 per month. Reducing the selling price by $5 per unit. This should increase the monthly sales by 5,000 units At this higher volume, additional equipment and salaried persounel would be required. This will increase fixed factory overhead by $2.,800 per month and fixed selling an ministrative costs by S2.500 per month. b. 13 PM Gateway