Adams Company currently produces and sells $7,200$ units annually of a product that has a variable cost of $$14$ per unit and annual fixed costs of $$240,000.$ The company currently earns a $$84,000$ annual profit. Assume that Adams has the opportunity to invest in new labor$-$saving production equipment that will enable the company to reduce variable costs to $$12$ per unit. The investment would cause fixed costs to increase by $$10,700$ because of additional depreciation cost.

Required

Use the equation method to determine the sales price per unit under existing conditions $($current equipment is used$).$

Prepare a contribution margin income statement, assuming that Adams invests in the new production equipment.