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 20%.

MARKHAM FARMS Contribution Margin Income Statement

Sales (1,300 Units @ $80 per unit) $104,000

Variable Costs (1,300 Units @ $15 per Unit) 19,500

Contribution Margin $84,500

Fixed Cost 40,000

Net Income (Loss) $44,500

Prepare a projected contribution margin income statement for Markham Farm assuming it purchases the new equipment. Assume sales level remains unchanged.

MARKHAM FARMS Contribution Margin Income Statement

Sales $________

Variable Costs $_______

Contribution Margin Fixed Cost $_________

Net Income (Loss) $_______________