Required information

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

$[$The following information applies to the questions displayed below.$]$

Burchard Company sold $40,000$ units of its only product for $\backslash (\backslash$$ $25\backslash )$ per unit this year. Manufacturing and selling the product required $\backslash (\backslash$$ $525,000\backslash )$ 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 $\backslash (\backslash$$ $4\mathrm{.}50\backslash )$ per unit and reduce direct labor costs to $\backslash (\backslash$$ $2\backslash )$ 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 $\backslash (\backslash$$ $30\backslash )$ per unit, which would decrease unit sales volume to $36,000$ units.

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

Required:

$1.$ 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 "per unit answers" to $2$ decimal places.