Perez Company makes a product that sells for $34 per unit. The company pays $12 per unit for the variable costs of the product and incurs annual fixed costs of $202,400. Perez expects to sell 21,400 units of product. Required Determine Perez's margin of safety expressed as a percentage. (Round your answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45)) % Margin of safety Vernon Company currently produces and sells 6,500 units annually of a product that has a variable cost of $14 per unit and ann fixed costs of $312,500. The company currently earns a $71,000 annual profit. Assume that Vernon has the opportunity to inves new labor-saving production equipment that will enable the company to reduce variable costs to $12 per unit. The investment w cause fixed costs to increase by $9,300 because of additional depreciation cost. Required a. Use the equation method to determine the sales price per unit under existing conditions (current equipment is used) b. Prepare a contribution margin income statement, assuming that Vernon invests in the new production equipment. Complete this question by entering your answers in the tabs below. Required A Required B Use the equation method to determine the sales price per unit under existing conditions (current equipment is used) Sales price per unit Vernon Company currently produces and sells 6,500 units annually of a product that has a variable cost of $14 per unit and annual fixed costs of $312,500. The company currently earns a $71,000 annual profit. Assume that Vernon has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $12 per unit. The investment would cause fixed costs to increase by $9,300 because of additional depreciation cost. Required a. Use the equation method to determine the sales price per unit under existing conditions (current equipment is used). b. Prepare a contribution margin income statement, assuming that Vernon invests in the new production equipment. Complete this question by entering your answers in the tabs below. Required B Required A Prepare a contribution margin income statement, assuming that Vernon invests in the new production equipment. VERNON COMPANY Contribution margin Income statement