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Zachary Company currently produces and sells 7 , 1 0 0 units annually of a product that has a variable cost of $ 1 3

Zachary Company currently produces and sells 7,100 units annually of a product that has a variable cost of $13 per unit and annual fixed costs of $282,000. The company currently earns a $73,000 annual profit. Assume that Zachary has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $11 per unit. The investment would cause fixed costs to increase by $9,700 because of additional depreciation cost.
Required
Use the equation method to determine the sales price per unit under existing conditions (current equipment is used).
Prepare a contribution margin income statement, assuming that Zachary invests in the new production equipment.

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