Markham Farms reports the following contribution margin income statement for the month of August. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $2 but will increase fixed costs by 15%. Prepare a projected contribution margin income statement for Markham Farms assuming it purchases the new equipment. Assume sales level remains unchanged.

MARKHAM FARMS Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (1,500 units at $75 per unit) Variable costs (1,500 units at $15 per unit) Contribution margin Fixed cost Net income (loss) $112,500 22,500 90,000 40,000 $ 50,000