Wilsar Manufacturing sold 420,000 units of its product for 64 per unit in 2011. Variable cost per unit is 52 and total Requirement 1. Calculate (a) contribution margin and (b) operating income. fixed costs are 1,680,000. (a) Determine the formula used to calculate the contribution margin. Requirements 1. Calculate (a) contribution margin and (b) operating income. 2. Wilsar's current manufacturing process is labour intensive. Kate Wagner, Wilsar's production manager, has Contribution = proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to 5,460,000. The variable costs are expected to decrease to 50 per unit. Wilsar expects to maintain the same The contribution margin is ( (Enter your answer as an integer.) sales volume and selling price next year. How would acceptance of Wagner's proposal affect your answers to (a) (b) Determine the formula used to calculate the operating income. and (b) in requirement 1? 3. Should Wilsar accept Wagner's proposal? Explain. Operating = Operating income is . (Enter your answer as an integer.) Requirement 2. How would acceptance of Wagner's proposal affect your answers to (a) and (b) in requirement 1? (Enter your answers as integers.) Recalculate (a) and (b) if the proposal is accepted. (a) The contribution margin would be ' under Wagner's proposal. (b) Operating income would change to I Requirement 3. Should Wilsar accept Wagner's proposal? Explain. (Complete the necessary drop-downs and enter your answer as an integer.) Operating income is expected to: by . Based on operating income alone, Wilsar should the proposal. Management would consider other factors before making the final decision. It is likely that product quality improve as a result of using state-of-the-art equipment. However, the proposal the company's fixed costs. This will the company's operating leverage and risk