Kidd Company produces two products. Budgeted annual income statements for the two products are provided as follows. Power 10 points Sales Variable cost Budgeted Munber 160 160 Per Unit $500 320 Budgeted Amount Cobb Company currently produces and sells 9,000 units annually of a product that has a variable cost of $20 per unit and annual fixed costs of $195,000. The company currently earns a $228,000 annual profit. Assume that Cobb has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $16 per unit. The investment would cause fixed costs to increase by $25,000 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 Cobb invests in the new production equipment.