Garrett Manufacturing sold 400,000 units of its product for $60 per unit in 2020. Variable cost per unit is $50, and total fixed costs are $1,600,000. Read the requirements. Requirement 1. Calculate (a) contribution margin and (b) opera (a) Determine the formula used to calculate the contribution mar Contribu The contribution margin is (b) Determine the formula used to calculate the operating incom Operat Requirements 1. Calculate (a) contribution margin and (b) operating income. 2. Garrett's current manufacturing process is labor intensive. Kate Bauer, Garrett's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $4,800,000. The variable costs are expected to decrease to $32 per unit. Garrett expects to maintain the same sales volume and selling price next year. How would acceptance of Bauer's proposal affect your answers to (a) and (b) in requirement 1? 3. Should Garrett's executives accept Bauer's proposal? Explain. Operating income is Requirement 2. Garrett's current manufacturing process is labo manufacturing equipment, which will increase the annual fixed c maintain the same sales volume and selling price next year. How Recalculate (a) and (b) if the proposal is accepted. (a) The contribution margin would be (b) Operating income would change to under Baders proposar. Print Done