What is the incremental profit for the year with adding a new inspection station?

In order to save valuable time in coating and sharpening, man- agement is considering forming a separate inspection station before the coating and sharpening process. The inspection station can utilize existing smoothing and buffing equipment, and it can be staffed on an as-needed basis by an employee who normally works in the chemical bath area, which has excess capacity (so the employee will not be missed for brief periods). Managementestimates that this action will free up 240 hours in coating and sharpening ([an average of 5 minutes per hour x 8 hours per day X 360 operating days per year]/60). Management has calcu- lated that the average contribution margin per unit for its prod- ucts is $300. The average contribution margin per hour spent in coating and sharpening is $850. Based on this information, estimate the incremental profit per year associated with adding the new inspection station. Model C210 Model D400 Chisel Chisel Selling price $500 $850 Less variable costs: Direct labor $ 85 $180 Direct material 150 180 Variable overhead 15 250 60 420 Contribution margin 250 430 Less allocated fixed costs 185 230 Profit per unit $ 65 $200 Time in coating and sharpening to produce 1 unit .2 hours .8 hours