Davidson Manufacturing scld 400,000 units of its product for S69 per unit in 2017. Variable cost per unit is $61, and total fixed costs are $1,600,000 Read the requirements Requirement 1. Calculate (a) contribution margin and (b) operating income (a) Determine the formula used to calculate the contribution margin. Sale price per unitTotal variable costs The contribution margin is $ (b) Determine the formula used to calculate the operating income. Contribution margin Operating Income Operating income is S Requirement 2. Davidson's current manufacturing process is labor intensive. Kate Fischer, Davidson's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $6,000,000. The variable costs are expected to decrease to $41 per unit Davidson 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 1? Recalculate (a) and (b) if the proposal is accepted. (a) The contribution margin would be $ under Fischer's proposal