Required information[The following information applies to the questions displayed below]Burchard Company sold 45,000 units of its only product for $18.00 per unit this year. Manufacturing and selling theproduct required $320,000 of fixed costs. Its per unit variable costs follow$5.00Direct materialsDirect labor4.00Variable overhead costs0.50Variable selling and administrative costs0.30For the next year, management will use a new material, which will reduce direct materials costs to $1.50 per unit andreduce direct labor costs to $2.80 per unit. Sales, total fixed costs, variable overhead costs per unit, and variable sellingand administrative costs per unit will not change. Management is also considering raising its selling price to $23.40 perunit, which would decrease unit sales volume to 38,250 units.Required:1. Compute the contribution margin per unit from (a) using the new material and (b) using the new material and increasing the sellingprice (Round your answers to 2 decimal places.)With new materialWith new materialand priceincreaseSales price per unitVariable costs per unitDirect materialsDirect laborVariable overheadVariable selling & administrative expensesVariable costs per unitContribution margin per unit 2. Prepare a contribution margin income statement for next year with two columns showing the expected results of (a) using the newmaterial and (b) using the new material and increasing the selling price.BURCHARD COMPANYContribution Margin Income StatementWith new materialWith newmaterial andprice increase45,0004Number of units:38,250

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Uploaded: 2024-03-20T06:32:49.000Z
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Description: Required information[The following information applies to the questions displayed below]Burchard Company sold 45,000 units of its only product for $18.00 per unit this year. Manufacturing and selling theproduct required $320,000 of fixed costs. Its