Poole Corporation has collected the following information after its first year of sales. Net sales were $1.6 million on 100,000 units, selling expenses were $240,000 (40% variable and 60% fixed), direct materials were $511,000, direct labour was $285,000, administrative expenses were $280,000 (20% variable and 80% fixed), and manufacturing overhead was $360,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. Management has projected that units sales will increase by 10% next year. Assume no change in the price of the units.

a. Calculate (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.)