Problem #3 - Boards Inc. fabricates skateboards that the company sells for $ 37.50 each. For the month, the company has total fixed costs of $4.800. Total variable cost per unit is $22.50 1. What is the contribution margin per unit? 2. Calculate the breakeven sales volume for the month. 3. Calculate the sales volume necessary to produce a target net income of $5,000 per month. The skateboards are manufactured in an old factory that relies heavily on worker labor. The company is considering the construction of a new automated plant that would increase fixed costs by $ 4,320 per month, but decrease the variable cost per board by $ 8.50. 4. What would the fixed costs and unit variable costs be under the proposal. Use the unit variable cost and sales price to calculate the unit contribution margin: Contribution Margin per unit Fixed Cost Variable cost per unit (sales price - VC) 5. Compute the breakeven under the new proposal. 6. Prepare comparative Contribution Margin Income Statements for the current and proposed manufacturing processes assuming the sales volume is 480 units per month Current Process Proposed new process Sales Revenue Variable Costs Contribution Margin Fixed Costs Net Income If the company is expected to sell 480 units a month, should they build the new factory? Yes No (circle one) Why