of alternative actions. An October 2017 contribution income statement for Anderson Company follows ANDERSON COMPANY Contribution Income Statement For Month of October 2017 $400,000 Sales (10,000 units $40) Less variable costs 50,000 Direct materials (10,000 units x $5). . . Direct labor (10,000 units $14) 60,000 50,000 (300,000 100,000 Contribution margin (10,000 units $10) Less fixed costs 50,000 60,000 (110.000) Selling and administrative.... $ (10,000) Net income (loss) Required Determine the effect of each of the following independent situations on monthly profit. a. Purchasing automated assembly equipment, which should redace direct labor costs by $5 per unit and increase variable overhead costs by $2 per unit and fixed factory overhead by $22.000 per month. b. Reducing the selling price by S5 per unit. This should increase the monthly sales by 5,000 units At this higher volume, additional equipment and salaried personnel would be required. This will increase fixed factory overhead by $2,800 per month and fixed selling and adninistrative costs by S2.500 per month 10/29/2017 3:12 PM Gateway