Campbell Company currently produces and sells 7,600 units annually of a product that has a...
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Accounting
Campbell Company currently produces and sells units annually of a product that has a variable cost of $ per unit and annual fixed costs of $ The company currently earns a $ annual profit. Assume that Campbell has the opportunity to invest in new laborsaving production equipment that will enable the company to reduce variable costs to $ per unit. The investment would cause fixed costs to increase by $ because of additional depreciation cost.
Required
Use the equation method to determine the sales price per unit under existing conditions current equipment is used
Prepare a contribution margin income statement, assuming that Campbell invests in the new production equipment.
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