Baird Company currently produces and sells 8,000 units annually of a product that has a variable cost of $15 per unit and annual fixed costs of $240,000. The company currently earns a $88,000 annual profit. Assume that Baird has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $13 per unit. The investment would cause fixed costs to increase by $10,700 because of additional depreciation cost.

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 Baird invests in the new production equipment.