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Problem $5-5$A $($Algo$)$ Contribution margin; income effects of alternative strategies LO C$2,$ A$1,$ P$2$

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Burchard Company sold $33,000$ units of its only product for $$18\mathrm{.}40$ per unit this year. Manufacturing and selling the

product required $$296,000$ of fixed costs. Its per unit variable costs follow.

For the next year, management will use a new material, which will reduce direct materials costs to $$1\mathrm{.}52$ per unit and

reduce direct labor costs to $$1\mathrm{.}68$ per unit. Sales, total fixed costs, variable overhead costs per unit, and variable selling

and administrative costs per unit will not change. Management is also considering raising its selling price to $$23\mathrm{.}00$ per

unit, which would decrease unit sales volume to $29,700$ units.

Problem $5-5$A $($Algo$)$ Part $1$

Required:

Compute the contribution margin per unit from

$($a$)$ using the new material and

$($b$)$ using the new material and increasing the selling price. Required:

Compute the contribution margin per unit from

$($a$)$ using the new material and

$($b$)$ using the new material and increasing the selling price.

Note: Round your answers to $2$ decimal places. Problem $5-5$A $($Algo$)$ Part $2$

Prepare a contribution margin income statement for next year with two columns showing the expected results of

$($a$)$ using the new material and

$($b$)$ using the new material and increasing the selling price.