of alternative actions. An October 2017 contribution income statement for Anderson Company to In an attempt to improve profit performance, Anderson Company's management is considera Problems LO1, 2, 3 P17-27. Multiple Changes in Profit Plans P ANDERSON COMPANY Contribution Income Statement For Month of October 2017 $40033853 $ 50,000 140,000 60,000 50,000 Sales (10,000 units X $40) Less variable costs Direct materials (10,000 units x $5). Direct labor (10,000 units X $14). Variable factory overhead (10,000 units x $6) Selling and administrative (10,000 units x $5). Contribution margin (10,000 units x $10). Less fixed costs Factory overhead Selling and administrative, (300.00 100.000 50,000 60,000 (110,000 $(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 reduce 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 $5 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 administrative costs by $2,500 per month c. Buying rather than manufacturing a component of Anderson's final product. This will increase di- rect materials costs by $12 per unit. However, direct labor will decline $4 per unit, variable factory overhead will decline S1 per unit, and fixed factory overhead will decline $15,000 per month d. Increasing the unit selling price by $4 per unit. This action should result in a 1,000-unit decrease in monthly sales. e. Combining alternatives (a) and (d)