Perez Company currently produces and sells 8,100 units annually of a product that has a variable...

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Perez Company currently produces and sells 8,100 units annually of a product that has a variable cost of $12 per unit and annual fixed costs of $378,700. The company currently earns a $83,000 annual profit. Assume that Perez has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $10 per unit. The investment would cause fixed costs to increase by $10,500 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 Perez invests in the new production equipment. Complete this question by entering your answers in the tabs below. Required A 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 Required B Prepare a contribution margin income statement, a PEREZ COMPANY Contribution margin Income statement Perez Company currently produces and sells 8,100 units annually of a product that has a variable cost of $12 per unit and annual fixed costs of $378,700. The company currently earns a $83,000 annual profit. Assume that Perez has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $10 per unit. The investment would cause fixed costs to increase by $10,500 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 Perez invests in the new production equipment. Complete this question by entering your answers in the tabs below. Required A 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 Required B Prepare a contribution margin income statement, a PEREZ COMPANY Contribution margin Income statement

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Solution Required A Sales price 69 per unit Working Sales Variable costs fixed costs profit Le... View the full answer