Required Information Problem 5-5A (Algo) Contribution margin; income effects of alternative strategies LO C2, A1, P2 [The following information applies to the questions displayed below.] Burchard Company sold 25,000 units of its only product for $20.00 per unit this year. Manufacturing and selling the product required $280,000 of fixed costs. Its per unit variable costs follow Direct materials Direct labor Variable overhead costs Variable selling and administrative costs 2.00 For the next year, management will use a new material, which will reduce direct materials costs to $1.50 per unit and reduce direct labor costs to $1.00 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 $24.00 per unit, which would decrease unit sales volume to 23.750 units. Problem 5-5A (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 Number of units: With new material 25,000 With new material and price increase 23,750 Problem 11-5A (Static) Payback perlod, break-even time, and net present value LO A1, P1, P3 Salsa Company is considering an investment in technology to improve its operations. The Investment costs $250,000 and will yield the following net cash flows. Management requires a 10% return on investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) 54:49 Year Net Cash Flow 2 $47,000 $2,000 75,000 94,000 125,000 rences Required: 1. Determine the payback period for this Investment 2. Determine the break-even time for this Investment 3. Determine the net present value for this investment 4. Should management invest in this project based on net present value? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to A decimal place.) Year Net Cash Flows Initial investment (250,000) Year 1 47,000 Year 2 52.000 Year 3 75,000 Year 4 04,000 Year 5 125.000 Payback period Cumulative Net Cash Flows years Fegsed 1 Required 2>