Burchard Company sold 42,000 units of its only product for $17.40 per unit this year. Manufacturing and selling the product required $314,000 of fixed costs. Its per unit variable costs follow. Direct materials Direct labor Variable overhead costs Variable selling and administrative costs $4.70 3.70 0.47 0.27 For the next year, management will use a new material, which will reduce direct materials costs to $1.41 per unit and reduce direct labor costs to $2.59 per unit. Sales, total fixed costs, variable overhead costs per unit, and variable selling and administrative costs per unit will not change. Management is also considering raising its selling price to $22.62 per unit, which would decrease unit sales volume to 35,700 units.

Burchard Company sold 42,000 units of its only product for $1740 per unit this year. Manufacturing and selling the product required $314,000 of fixed costs its per unit variable costs follow. For the next year, management will use a new material, which will reduce direct materials costs to $1.41 per unit and reduce direct labor costs to $2.59 per unit Sales; total ficed costs, variable overhead costs per unit, and variable seiling and administratve costs per unit will not change. Management is also considering ralsing its selling price to $2262 per unit, which would decrease unit sales volume to 35,700 units. requirea: 1. Compute the contribution margin per unit from (a) using the new material and (b) using the new material and increasing the selling price. Note: Round your onswers to 2 decimal places. 2. Prepare a contribution margin income statement for next year with two columns showing the expected results of (a) using the new material and (b) using the new material and increasing the selling price