Munoz Company currently produces and sells 7,400 units annually of a product that has a variable...

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Munoz Company currently produces and sells 7,400 units annually of a product that has a variable cost of $17 per unit and annual fixed costs of $270,400. The company currently earns a $70,000 annual profit. Assume that Munoz has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $15 per unit. The investment would cause fixed costs to increase by $9,500 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 Munoz invests in the new production equipment. > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a contribution margin income statement, assuming that Munoz invests in the new production equipment. MUNOZ COMPANY Contribution margin Income statement Sales $ 466,200 Variable costs 111,000 x Contribution margin $ 355,200 Fixed costs 279,900 x Net income $ 75,300 < Required A Required B < Prev 4 of 5 Next Munoz Company currently produces and sells 7,400 units annually of a product that has a variable cost of $17 per unit and annual fixed costs of $270,400. The company currently earns a $70,000 annual profit. Assume that Munoz has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $15 per unit. The investment would cause fixed costs to increase by $9,500 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 Munoz invests in the new production equipment. > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a contribution margin income statement, assuming that Munoz invests in the new production equipment. MUNOZ COMPANY Contribution margin Income statement Sales $ 466,200 Variable costs 111,000 x Contribution margin $ 355,200 Fixed costs 279,900 x Net income $ 75,300 < Required A Required B < Prev 4 of 5 Next