Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year but will decrease variable costs by $3.50 per unit. Compute the contribution margin per unit if the machine is purchased. a) $22.50 b) $26.00 c) $29.50 d) $28.50 e) $27.50

Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year but will decrease variable costs by $3.50 per unit. Compute the contribution margin per unit if the machine is purchased. a) $22.50 b) $26.00 c) $29.50 d) $28.50 e) $27.50