Bailey Manufacturing sold 435,000 units of its product for $60 per unit in 2017. Variable cost per unit is $50, and total fixed costs are $1,740,000. Read the requirements. Requirement 1. Calculate (a) contribution margin and (b) operating income. (a) Determine the formula used to calculate the contribution margin- Total sales Total variable costs Contribution margin i Requirements The contribution margin is s 4,350,000 (b) Determine the formula used to calculate the operating income. Contribution margin Total fixed costs Operating Income 1. Calculate (a) contribution margin and (b) operating income. 2. Bailey's current manufacturing process is labor intensive. Kate Fischer, Bailey's production manager, proposed Investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $5,220,000. The variable costs are expected to decrease to S46 per unit. Bailey expects to maintain the same sales volume and selling price next year. How would acceptance of Fischer's proposal affect your answers to (a) and (b) in requirement 17 3. Should Bailey accept Fischer's proposal? Explain. Operating income is S Print Done