Homework Answers
Contribution margin=Sales-Variable cost
=(17-11.5)=$5.5 per unit
| Current | Proposed | |
| Unit Sales | 13600 | (13600+1500)=15100 |
| Contribution margin | (13600*5.5)=74800 | (15100*5.5)=83050 |
| Fixed expenses | 28000 | 28000 |
| Net income | 46800 | 55050 |
Hence increase in net income=(55050-46800)=$8250
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