Required information [The following information applies to the questions displayed below] Burchard Company sold 40,000 units of its only product for $17.00 per unit this year. Manufacturing and selling the product required $310,000 of fixed costs. Its per unit variable costs follow. Direct materials Direct labor Variable overhead costs Variable selling and administrative costs $ 4.50 3.50 0.45 0.25 For the next year, management will use a new material, which will reduce direct materials costs to $2.25 per unit and reduce direct labor costs to $1.75 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 $20.40 per unit, which would decrease unit sales volume to 38,000 units

Required: 1. Compute the contribution margin per unit from (a) using the new material and (b) using the new material and increasing the selling price. (Round your answers to 2 decimal places.) 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

[The following information applles to the questions displayed below] Burchard Company sold 40,000 units of its only product for $17,00 per unit this year Manufacturing and selling the product required $310,000 of fixed costs. Its per unit variable costs follow. For the next year, management will use a new material, which will reduce direct materials costs to $2.25 per unit and reduce direct labor costs to $175 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 $2040 per unit, which would decrease unit sales volume to 38,000 units Required: 1. Compute the contribution margin per unit from (o) using the new materiaf and (b) using the new material and increasing the selling price: (Round your onswers to 2 decimal places.) \begin{tabular}{|l|l|l|} \hline & With new material & Withnewmaterialandpriceincrease \\ \hline Sales price per unit & & \\ \hline Variable costs per unit & & \\ \hline Direct materials & & \\ \hline Direct labor & & \\ \hline Variable overhead & & \\ \hline Variable selling \& administrative expenses & & \\ \hline Variable costs per unit & & \\ \hline Contribution margin per unit & & \\ \hline \end{tabular} \begin{tabular}{|l|r|r|} \hline \multicolumn{3}{|c|}{ BURCHARD COMPANY } \\ \hline Contribution Margin Income Statement \\ \hline Number of units: & With new material & Withnewmaterialandpriceincrease \\ \hline & & \\ \hline & 40,000 & 38,000 \\ \hline & & \\ \hline & & \\ \hline \end{tabular}