! Required information (The following information applies to the questions displayed below.) Burchard Company sold 40,000 units of its only product for $25 per unit this year. Manufacturing and selling the product required $525,000 of fixed costs. Its per unit variable costs follow. Direct materials $ 8.00 Direct labor Variable overhead costs Variable selling and administrative costs For the next year, management will use a new material, which will reduce direct materials costs to $4.50 per unit and reduce direct labor costs to $2 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 $30 per unit, which would decrease unit sales volume to 36,000 units. 5.00 1.00 0.50 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. Answer is complete but not entirely correct. BURCHARD COMPANY Contribution Margin Income Statement With new With new material and material price increase Number of units: 40,000 36,000 02 Sales Variable costs Contribution margin Fixed costs Income 1,000,000 $ 1,080,000 40,000 36,000 960,000 1,044,000 260,000 234,000 700,000 $ 810,000 > S