Gibson Company currently produces and sells 7,700 units annually of a product that has a variable cost of $8 per unit and annual fixed costs of $342,500. The company currently earns a $81,000 annual profit. Assume that Gibson has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $6 per unit. The investment would cause fixed costs to increase by $10,600 because of additional depreciation cost. Required a. Use the equation method to determine the sales price per unit under existing conditions (current equipment is used). b. Prepare a contribution margin income statement, assuming that Gibson invests in the new production equipment. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a contribution margin income statement, assuming that Gibson invests in the new production equipment. GIBSON COMPANY Contribution margin Income statement Sales $ 479,500 Variable costs 42,000 Contribution margin $ 437,500 Fixed costs Net income $ 353,100