Bene Petit currently offers three meal sizes: single-serve, dual-serve, and family-size. Single-serve meals make up about 5% of total sales revenue and have the lowest contribution margin of the three products. Taylor is trying to decide whether to eliminate single-serve meal kits but is unsure how it would affect profit and the number of meals donated to homeless families. The following additional details are available:

• The price of a single-serve meal is $5.
• Variable manufacturing costs for customer meals are $2.20 per single-serve meal, $3.20 per dual-serve meals, and $5.20 per family-size meal.
• Variable manufacturing costs are $1.25 per donated meal.
• Variable delivery expenses for customer meals are $2 per order and the average order size is 4 meals per order.
• Delivery expenses for donated meals are $125 for every 500 meals delivered, or about $0.25 per donated meal.
• About $500 in monthly advertising expenses could be saved if the single-serve product was eliminated.
• Taylor believes that about 25% of single-serve customers would switch to dual-serve meals but would reduce their order size from 4 meals per week to 2 meals per week.

How much contribution margin will be gained from the single-serving customers who switch to dual-serve meals?

Additional information about selling prices, variable costs, and fixed costs is summarized below: - The average sales price for customer meals is $5 per serving. - The average direct materials (ingredients) cost of customer meals is $1 per serving. - Direct labor costs average $0.75 per customer meal. - Variable manufacturing overhead costs are applied at a rate equal to 60% of direct labor. - The delivery expense for customer meals is $2 per customer order. - The incremental cost of producing the donated meals is $1.25 per meal. - The delivery expense for donated meals is $125 per delivery to community partners. - The following fixed costs are allocated to customer meals based on total sales revenue: - Fixed manufacturing overhead costs are $75,000 per year. - Fixed selling expenses are $29,000 per year. - Fixed administrative expenses are $40,000 per year. The attached excel file shows a contribution margin income statement based on these starting assumptions. You should return to this starting spreadsheet for each part of the case below