Cvp computations. garrett manufacturing sold 410,000 units of its product for $68 per unit in 2017. variable cost per unit is $60, and total fixed costs are $1,640,000.required: 1. calculate (a) contribution margin and (b) operating income.2. garrett’s current manufacturing process is labor intensive. kate schoenen, garrett’s production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the ­annual fixed costs to $5,330,000. the variable costs are expected to decrease to $54 per unit. ­garrett expects to maintain the same sales volume and selling price next year. how would acceptance of schoenen’s proposal affect your answers to (a) and (b) in requirement 1? 3. should garrett accept schoenen’s proposal? explain.

a) 8 dollars

b) 1,640,000

2.-  It should be rejected as decreases operating income to 410,000 from 1,640,000

contribution margin: $14

operating income: $ 410,000

Explanation:

68 - 60 = 8

b)

units sold x $8 contribution less fixed cost

410,000 x 8 - 1,640,000 = 1,640,000

2 contribution margin:

68 - 54 = 14

410,000 x 14 - 5,330,000 = 410,000

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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the answer is     d. in our global economy, most job growth will be in services, but manufacturing jobs will exist, too.