Laurie Vaden is a physician with her own practice. She has developed contracts with several large employers to perform routine exams, fitness-for-duty exams and initial screening of on-the-job injuries. She provides 100 exams per month, charging $100 per exam. Under this contract, she estimates her avoidable fixed costs attributable to the exams is $1,000 per month, and she pays a lab an average of $15 per exam. She has decided she needs to increase profit, so she is considering raising her fee to $125, even though there may be a 10% loss in the number of exams she does per month. Determine the current and predicted: revenues, variable costs, total contribution margin and product margin. What do you recommend she do

1) Current Product Margin

2) Predicted Product Margin