Morton Company's contribution format income statement for last month is given below: Sales (44,000 units x $ 27 per unit) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,188,000 831,600 356,400 285,120 $ 71,280 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 company has a large amount of unused capacity and is studying ways of improving profits.