Required information Problem 18-5A (Algo) Contribution margin: Income effects of alternative strategies LO C2, A1, P2 [The following information applies to the questions displayed below) Burchard Company sold 41,000 units of its only product for $17.20 per unit this year. Manufacturing and selling the product required $312,000 of fixed costs. Its per unit variable costs follow. Direct Direct labor Variable overhead coat Variable selling and administrative cont 5.4.60 3.60 0.46 0.26 For the next year management will use a new material, which will reduce direct materials costs to $1,84 per unit and reduce direct labor costs to $2.16 per unit Sales, total fixed costs, variable overhead costs per unit, and variable selling and administrative costs per unit will not change Management is also considering raising its selling price to $21.50 per unit, which would decrease unit sales volume to 36.900 units Problem 18-5A (Algo) Part 1 Required: 1. Compute the contribution margin per unit from (s} using the new material and (b) using the new material and increasing the selling price. (Round your answers to 2 decimal places.) With new mata With new material and price sale price per Variable costs per Dasma Director Vred Variatie sting & Vanto en Contribution margt 000 Problem 18-5A (Algo) Part 2 2. Prepare a contribution margin income statement for next year with two columns showing the expected results of (a) using the new material and (b) using the new material and increasing the selling price. BURCHARD COMPANY Contribution Margin Income Statement With new material and price Increase Number of units 41,000 36,900 With new material 0 0 $ OS