Exercise $3-13$A $($Algo$)$ Conducting sensitivity analysis using the equation method LO $3-5$

Campbell Company currently produces and sells $7,100$ units annually of a product that has a variable cost of $$10$ per unit and annual fixed costs of $$246,500.$ The company currently earns a $$73,000$ annual profit. Assume that Campbell has the opportunity to invest in new labor$-$saving production equipment that will enable the company to reduce variable costs to $$8$ per unit. The investment would cause fixed costs to increase by $$9,300$ because of additional depreciation cost.

Required

a$.$ Use the equation method to determine the sales price per unit under existing conditions $($current equipment is used$).$

b$.$ Prepare a contribution margin income statement, assuming that Campbell invests in the new production equipment.

Complete this question by entering your answers in the tabs below.

Required B

Use the equation method to determine the sales price per unit under existing conditions $($current equipment is used$).$

Sales price

per unit

Required A