$ 4.50 3.80 PA12. LO 10.6 At Gems in the Rough a jewelry company the engraving department is a bottleneck. The company is considering hiring an extra worker, whose salary will be $56.000 per year, to ease the problem. Using the extra worker, the company will be able to engrave 8,000 more units per year. The selling price per unit is $16. The cost per unit currently is $11.85 as shown Direct material Direct labor 2. TO Variable overhead 1.45 Fixed overhead (primarily depreciation of equipment Total $11.85 What is the annual financial impact of hiring the extra worker for the bottleneck process? Solution Selling price per unit Less variable costs per unit: Direct material Direct labor Variable overhead Contribution margin per unit Differential units Differential profit before cost of additional worker Cost of additional worker Profit increase of hiring an additional worker