Morton Company's contribution format income statement for last month is given below: Sales (41,000 units x $28 per unit) Variable expenses $1,148,000 803,600 Contribution margin Fixed expenses 344,400 275,520 Net operating income $ 68,880 The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The has a large amount of unused capacity and is studying ways of improving profits. company Required 1. New equipment has come onto the market that would allow Morton Company to automate a portion of its operations. Variable expenses would be reduced by $8.40 per unit. However, fixed expenses would increase to a total of $619,920 each month. Prepare two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. (Round your "Per unit" answers to 2 decimal places.)