Westover Manufacturing sold 440,000 units of its product for $72 per unit in 2020. Variable cost per unit is $62, and total fixed costs are $1,760,000. Read the requirements. Requirement 1. Calculate (a) contribution margin and (b) operating income. (a) Determine the formula used to calculate the contribution margin. The contribution margin is = Contribution margin (b) Determine the formula used to calculate the operating income. Operating Income Operating income is Requirement 2. Westover's current manufacturing process is labor intensive. Kate Wolf, Westover's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $4,400,000. The variable costs are expected to decrease to $58 per unit. Westover expects to maintain the same sales volume and selling price next year. How would acceptance of 1A1-10 Type here to search O W 23 Time Remaining: 01:38:15 Next 5:06 PM 5/8/2022 = Quiz: Exam 1 < Question 6 of 11 > This quiz: 11 point(s) possible This question: 1 point(s) possible Submit quiz Westover Manufacturing sold 440,000 units of its product for $72 per unit in 2020. Variable cost per unit is $62, and total fixed costs are $1,760,000. Read the requirements. Spray intuitio Requirement 2. Westover's current manufacturing process is labor intensive. Kate Wolf, Westover's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $4,400,000. The variable costs are expected to decrease to $58 per unit. Westover expects to maintain the same sales volume and selling price next year. How would acceptance of Wolf's proposal affect your answers to (a) and (b) in requirement 1? Recalculate (a) and (b) if the proposal is accepted. (a) The contribution margin would be (b) Operating income would change to under Wolf's proposal. Requirement 3. Should Westover accept Wolf's proposal? Explain. Operating income is expected to by the proposal. Based on the operating income alone, Westover should Manancement would consider other factors hefore making the final decision It is likely that product Type here to search O W O X 23 B C Time Remaining: 01:38:04 Next < 5:06 PM 5/8/2022 Westover Manufacturing sold 440,000 units of its product for $72 per unit in 2020. Variable cost per unit is $62, and total fixed costs are $1,760,000. Read the requirements. Kecalculate (a) and (D) IT the proposal is accepted. (a) The contribution margin would be (b) Operating income would change to under Wolf's proposal. Requirement 3. Should Westover accept Wolf's proposal? Explain. Operating income is expected to income alone, Westover should by the proposal. Based on the operating Manangement would consider other factors before making the final decision. It is likely that product improve as a result of using state-of-the-art equipment. However, the quality proposal the company's fixed cost. This will the company's operating leverage and risk. Type here to search O 23 W This question: 1 point(s) possible > Time Remaining: 01:37:55 KAC 000 units of its produ Requirements < Question 6 of 11 > This quiz: 11 point(s) possible This question: 1 point(s) possible Subr Cribution margin and calculate the contrib 1. Calculate (a) contribution margin and (b) operating income. 2. Westover's current manufacturing process is labor intensive. Kate Wolf, Westover's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $4,400,000. The variable costs are expected to decrease to $58 per unit. Westover expects to maintain the same sales volume and selling price next year. How would acceptance of Wolf's proposal affect your answers to (a) and (b) in requirement 1? 3. Should Westover's executives accept Wolf's proposal? Explain. calculate the operati Print Done - X nt manufacturing pro e-art manufacturing equipment, which 00. The variable costs are expected to decrease to po per unit. Westover expects to maintain the same sales volume and selling price next year. How would accep Time Remaining: 01:37:43