EX6-14

REQ-a
NUMBER OF UNNIT SOLD 15,000
SALES $ 180,000 12
VARIABLE EXPENSES $ 120,000 8
CONTRIBUTION MARGIN $ 60,000
FIXED EXPENSES $ 50,000
NET OPERATING INCOME $ 10,000

SALES $ 500,000 100%

VARIABLE EXPENSES $ 400,000 80%
CONTRIBUTION MARGIN $ 100,000 20%
FIXED EXPENSES $ 93,000
NET OPERATING INCOME $ 7,000

NUMBER OF UNNIT SOLD 15,000

SALES $ 180,000 12
VARIABLE EXPENSES $ 120,000 8
CONTRIBUTION MARGIN $ 60,000
FIXED EXPENSES $ 50,000
NET OPERATING INCOME $ 10,000

NUMBER OF UNNIT SOLD 10,000

SALES $ 200,000 20
VARIABLE EXPENSES $ 70,000 7
CONTRIBUTION MARGIN $ 130,000
FIXED EXPENSES $ 118,000
NET OPERATING INCOME $ 12,000
NUMBER OF UNNIT SOLD 4000
SALES $ 100,000 25
VARIABLE EXPENSES $ 60,000 15
CONTRIBUTION MARGIN $ 40,000
FIXED EXPENSES $ 32,000
NET OPERATING INCOME $ 8,000

SALES $ 500,000 100%

VARIABLE EXPENSES $ 400,000 80%
CONTRIBUTION MARGIN $ 100,000 20%
FIXED EXPENSES $ 93,000
NET OPERATING INCOME $ 7,000

NUMBER OF UNNIT SOLD 4000

SALES $ 100,000 25
VARIABLE EXPENSES $ 60,000 15
CONTRIBUTION MARGIN $ 40,000
FIXED EXPENSES $ 32,000
NET OPERATING INCOME $ 8,000

NUMBER OF UNNIT SOLD 6000

SALES $ 300,000 50
VARIABLE EXPENSES $ 210,000 35
CONTRIBUTION MARGIN $ 90,000
FIXED EXPENSES $ 100,000
NET OPERATING INCOME $ (10,000)
 UNIT SALES TO BREAK-EVEN (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)
UNIT SALES TO BREAK-EVEN ( $108,000)÷$18 PER STOVE
UNIT SALES TO BREAK-EVEN 6000 STOVES

OR AT $ 50 PER STOVE , $ 300,000 IN SALES

2 AN INCREASE IN VARIABLE EXPENSES AS PERCENTAGE OF THE SELLING PRICE WOULD RESULT IN HIGHER BREAK-EV

3 PRESENT PROPOSED
NUMBER OF UNNIT SOLD 8,000 10,000
SALES $ 400,000 50 $ 450,000 45
VARIABLE EXPENSES $ 256,000 32 $ 320,000 32
CONTRIBUTION MARGIN $ 144,000 $ 130,000 13
FIXED EXPENSES $ 108,000 $ 108,000
NET OPERATING INCOME $ 36,000 $ 22,000

8000 STOVES x 1.25= 10000 STOVES

** $50X .9= $45
AS SHOWN AVOBE , A 25% INCREASE IN VOLUME IS NOT ENOUGHTO OFFSET A 10% REDUCTION IN SELLING PRICE

4
UNIT SALES TO ATTAIN TARGET PROFIT ( TARGET PROFIT+FIXEDEXPENSES)÷ UNIT CONTRIBUTION MARGI
UNIT SALES TO ATTAIN TARGET PROFIT ( $35,000+$108,000)÷$13
UNIT SALES TO ATTAIN TARGET PROFIT 11000 BALLS
NS MARGIN)

ESULT IN HIGHER BREAK-EVEN POINT. IF VARIABLE EXPENSES INCREASE AS PERCENTAGE OF SALES, THE CONTRIBUTION MARGIN WILL DE

DUCTION IN SELLING PRICE , THUSE NET OPERTAING INCOME DECREASES.

NIT CONTRIBUTION MARGIN)

NTRIBUTION MARGIN WILL DECREASE AS A PERCENTAGE OF SALES. WITH A LOWER CM RATIO, MORE STOVES WOULD HAVE TO BE SOLD T
S WOULD HAVE TO BE SOLD TO GENERATE ENOUGH CONTRIBUTION MARGIN TO COVER THE FIXED COSTS.
1

1 THE CM RATIO IS 30% TOTAL PER UNIT PERCENTAGE

NUMBER OF UNITS SOLD 19,500
SALES $ 585,000 30 100%
VARIABLE EXPENSES $ 409,500 21 70%
CONTRIBUTION MARGIN $ 175,500 9 30%
FIXED EXPENSES $ -
NET OPERATING INCOME $ 175,500

UNIT SALES TO BREAK-EVEN (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

UNIT SALES TO BREAK-EVEN ( $180,000)÷$9
UNIT SALES TO BREAK-EVEN 20000 UNITS

DOLLAR SALES TO BREAK-EVEN (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

DOLLAR SALES TO BREAK-EVEN ( $180,000+0000)÷.30
DOLLAR SALES TO BREAK-EVEN $ 600,000.00 IN SALES

2
INCREMENTAL CONTRIBUTION MARGIN :
$80,000 INCREASED SALES x 0,30 CM RATIO $ 24,000.00
LESS INCREAED ADVERTISING COST $ 16,000.00
INCREASED IN MONTHLY NET OPERTAING INCOME$ 8,000.00

SINCE THE IS NOW SHOWING A LOSS OF $4,500 PER MONTH , IF THE CHANGES ARE ADOPTED , THE LOSS WILL TRU

3 NUMBER OF UNNIT SOLD 39,000

SALES $ 1,053,000 27
VARIABLE EXPENSES $ 819,000 21
CONTRIBUTION MARGIN $ 234,000
FIXED EXPENSES ( $180,000+60000) $ 240,000
NET OPERATING INCOME $ (6,000)

* $30-($30X40%)= $27

4 UNIT SALES TO ATTAIN TARGET PROFIT (( TARGET PROFIT+FIXED UNIT CONTRIBUTION MARGIN))
UNIT SALES TO ATTAIN TARGET PROFIT ( $9,750+$180,000)÷$8.25
UNIT SALES TO ATTAIN TARGET PROFIT 23000 UNITS
 * $30-21.75= $8.25

5
SELLING PRICE 30 100%
VARIABLE EXPENSES 18 60%
CONTRIBUTION MARGIN 12 40%

UNIT SALES TO BREAK-EVEN (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

UNIT SALES TO BREAK-EVEN ( $180,000+72000)÷$12
UNIT SALES TO BREAK-EVEN 21000 UNITS

DOLLAR SALES TO BREAK-EVEN (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

DOLLAR SALES TO BREAK-EVEN ( $180,000+72000)÷.40
DOLLAR SALES TO BREAK-EVEN $ 630,000.00

b COMPARATIVE INCOME STATEMENTS FOLLOW

NOT AUTOMATED AUTOMATED
NUMBER OF UNNIT SOLD 26,000 26,000
SALES $ 780,000 30 $ 780,000
VARIABLE EXPENSES $ 546,000 21 $ 468,000
CONTRIBUTION MARGIN $ 234,000 $ 312,000
FIXED EXPENSES ( $180,000+60000) $ 180,000 $ 252,000
NET OPERATING INCOME $ 54,000 $ 60,000

C WHETHER OR NOT THE COMPANY SHOULD AUTOMATE ITS OPERATIONS DEPENDS ON HOW MUCH RISK THE COM
THE GREATEST RISK OF AUTOMATING IS THAT FUTURE SALES MAY DROP BACK DOWN TO PRESENT LEVELS ( ONLY

C MONTH, FOR EXAMPLE , THE HIGHER CM RATIO WILL GENERATE $6,000 HIGHER CM RATIO MEANS THAT ONCE TH
THE GREATEST RISK OF AUTOMATING IS THAT FUTURE SALES MAY DROP BACK DOWN TO PRESENT LEVELS ( ONLY
ONS MARGIN)

ONS MARGIN)

OPTED , THE LOSS WILL TRUN INTO A PROFIT OF $3,500 EACH MONTH N( $8,000 LESS $4,500= $3,500)

RIBUTION MARGIN))
ONS MARGIN)

ONS MARGIN)

AUTOMATED

30
18

HOW MUCH RISK THE COMPANY IS WILLING TO TAKE AND ON PROSPECTS FOR FUTURE SALES . THE PROPOSED CHANGE WOULD INCREA
TO PRESENT LEVELS ( ONLY 19,500 UNITS PER MONTH), AND AS A RESULT, LOSSES WILL BE EVEN LARGER THAN AT PRESENT DUE TO THE

ATIO MEANS THAT ONCE THE BREAK-EVEN POINT IS REACHED, PROFIT WILL INCREASE MORE RAPIDLY THAN AT PRESENT. IF 26,000 UNITS
TO PRESENT LEVELS ( ONLY 19,500 UNITS PER MONTH), AND AS A RESULT, LOSSES WILL BE EVEN LARGER THAN AT PRESENT DUE TO THE
D CHANGE WOULD INCREASE THE COMPANY'S FIXED COSTS AND ITS BREAK-EVEN POINT. HOWEVER , THE CHANGES WOULD ALSO INCRE
N AT PRESENT DUE TO THE COMPANY'S GREATER FIXED COSTS. ( NOTE THE PROBLEM STATES THAT SALES ARE ERRATIC FROM MONTH TO

T PRESENT. IF 26,000 UNITS ARE SOLD NEXT MONTH, FORBEXAMPLE , THE HIGHER CM RATIO WILL GENERATE $6,000 MORE IN PROFIT TH
N AT PRESENT DUE TO THE COMPANY'S GREATER FIXED COSTS. ( NOTE THE PROBLEM STATES THAT SALES ARE ERRATIC FROM MONTH TO
 HANGES WOULD ALSO INCREASE MORE RAPIDLY THAN AT PRESENT.MONTH, FOR EXAMPLE , THE HIGHER CM RATIO WILL GENERATE $6,
ARE ERRATIC FROM MONTH TO MONTH). IN SUM, THE PROPOSED CHANGES WILL HELP THE COMPANY IF SALES CONTINUE TO TREND UP

TE $6,000 MORE IN PROFIT THE IF NO CHANGES ARE MADE

ARE ERRATIC FROM MONTH TO MONTH). IN SUM, THE PROPOSED CHANGES WILL HELP THE COMPANY IF SALES CONTINUE TO TREND UP
 M RATIO WILL GENERATE $6,000 HIGHER CM RATIO MEANS THAT ONCE THE BREAK-EVEN POINT IS REACHED, PROFIT WILL INCREASE MO
ALES CONTINUE TO TREND UPWARD IN FUTURE MONTHS; THE CHANGES WILL HURT THE COMPANY IF SALES DROP BACK DOWN TO OR N

ALES CONTINUE TO TREND UPWARD IN FUTURE MONTHS; THE CHANGES WILL HURT THE COMPANY IF SALES DROP BACK DOWN TO OR N
ED, PROFIT WILL INCREASE MORE RAPIDLY THAN AT PRESENT. IF 26,000 UNITS ARE SOLD NEXT MONTH, FOR EXAMPLE , THE HIGHER CM R
S DROP BACK DOWN TO OR NEAR PRESENT LEVELS.

S DROP BACK DOWN TO OR NEAR PRESENT LEVELS.

EXAMPLE , THE HIGHER CM RATIO WILL GENERATE $6,000 MORE IN PROFIT THE IF NO CHANGES ARE MADE
1 THE CONTRIBUTION INCOME STATEMENT WOULD BE :
SALES ( 15,000 units X $ 70 PER unit) 1050000 70
VARIABLE EXPENSES ( 15000 unit X $70 PER uni4) 600000 40
CONTRIBUTION MARGIN 450000 30
FIXED EXPENSES 540000
NET OPERATING INCOME/ (LOSS) (90,000)

2 BREAK-EVEN POINT IN UNIT SALES (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

BREAK-EVEN POINT IN UNIT SALES ( $540,000÷$18)
BREAK-EVEN POINT IN UNIT SALES 18000 UNIT

18,000 UNITS X $ 70 PER UNIT= $ 1,260,000 TO BREAK EVEN

UNIT
UNIT VARIABLE CONTRIBUTION
UNIT SELLING PRICE EXPENSES MARGIN
$ 70 $ 40 $ 30
$ 68 $ 40 $ 28
$ 66 $ 40 $ 26
$ 64 $ 40 $ 24
$ 62 $ 40 $ 22
$ 60 $ 40 $ 20
$ 58 $ 40 $ 18
$ 56 $ 40 $ 16

THE MAXIMUM PROFIT IS $270,000. THIS LEVEL OF PROFIT CAN BE EARNED BY SELLING 45,000 UNITS AT PRICE OF

4 AT SELLING PRICE OF $58 PER UNIT , THE CONTRIBUTION MRGIN IS $18 PER UNIT . THEREFORE

UNIT SALE TO BREAK-EVEN POINT (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

UNIT SALE TO BREAK-EVEN POINT ( $540,000÷$18)
UNIT SALE TO BREAK-EVEN POINT 30000 UNIT

30,000 UNITS X $ 58 PER UNIT= $1,740,000 TO BREAK EVEN

this break-even point is different from the break-even point in part (2) because of the change in selling price . With
NTRIBUTIONS MARGIN)

TOTAL
CONTRIBUTION NET OPERATING
VOLUME ( UNITS) MARGIN FIXED EXPENSES INCOME
15000 $ 450,000 $ 540,000 $ (90,000)
20000 $ 560,000 $ 540,000 $ 20,000
25000 $ 650,000 $ 540,000 $ 110,000
30000 $ 720,000 $ 540,000 $ 180,000
35000 $ 770,000 $ 540,000 $ 230,000
40000 $ 800,000 $ 540,000 $ 260,000
45000 $ 810,000 $ 540,000 $ 270,000
50000 $ 800,000 $ 540,000 $ 260,000

45,000 UNITS AT PRICE OF $58 EACH

NTRIBUTIONS MARGIN)

ange in selling price . With the change in selling price the unit contribution margin drops from $30 to $18, resulting in an increase in the br
ulting in an increase in the break even point
 1a
a GIVEN,
SELLING PRICE 25 100%
VARIABLE EXPENSES 15 60%
CONTRIBUTION MARGIN 10 40%

UNIT SALES TO BREAK-EVEN (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

UNIT SALES TO BREAK-EVEN ( $210,000÷$10)
UNIT SALES TO BREAK-EVEN 21000 BALLS

b THE DGREE OF OPERATING LEVERAGE IS:

DEGREE OF OPERATING LEVERAGE ( CONTRIBUTION MARGIN ÷NET OPERATING INCOME)
DEGREE OF OPERATING LEVERAGE ($300,000÷$90,000)
DEGREE OF OPERATING LEVERAGE 3.333333

2 THE NEW CM RATIO

SELLING PRICE 25 100%
VARIABLE EXPENSES 18 72%
CONTRIBUTION MARGIN 7 28%

UNIT SALES TO BREAK-EVEN (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

UNIT SALES TO BREAK-EVEN ( $210,000÷$7)
UNIT SALES TO BREAK-EVEN 30000 BALLS

3 UNIT SALES TO ATTAIN TARGET PROFIT (( TARGET PROFIT+FIXED UNIT CONTRIBUTION MARGI
UNIT SALES TO ATTAIN TARGET PROFIT (( $90,000+$210,000)÷$7))
UNIT SALES TO ATTAIN TARGET PROFIT 42857 BALLS

THUS,O EARN SAME AMOUNT OF PROFIT SALES WILL HAVE TO INCREASE BY 12,857 BALLS (42,857 BALLS, LESS 30,0
PRESENT EXPECTED
CONTRIBUTIONS MARGIN RATIO 40% 28%
BREAK-EVEN POINT (IN BALLS) 21000 30000
SALES IN BALL NEEDED TO EARN A $90,000 PROFIT 30000 42857

NOTE THAT IF VARIABLE COST DO INCREASE NEST YEAR , THE N THE COMPANY WILL JUST BREAK EVEN IF IT SELLS T

4 THE CONTRIBUTION MARGIN RATIO LAST YEAR WAS 40% , IF WE LET P EQUAL THE NEW SELLING PRICE, THEN

P=$18+.40P
0.60P=$18
P=$18÷.60P
P= $30
TO VERIFY:
 SELLING PRICE 30 100%
VARIABLE EXPENSES 18 60%
CONTRIBUTION MARGIN 12 40%
HEREFORE TO MAINTAIN A $40% CM RATIO , A $ 3 INCREASE IN VARIABLE COSTS WOULD REQUIRE A $5 INCREASE

5 SELLING PRICE 25 100%

VARIABLE EXPENSES 9 36%
CONTRIBUTION MARGIN 16 64%

* $15-($15X40%)= $9 9

UNIT SALES TO BREAK-EVEN (FIXED EXPENSES÷UNIT CONTRIBUTIONS MARGIN)

UNIT SALES TO BREAK-EVEN ( $420,000÷$16)
UNIT SALES TO BREAK-EVEN 26250 BALLS

ALTHOUGH THIS NEW BREAK-EVEN IS GREATER THAN THE COMPANY'S PRESENT BREAK-EVEN OF 21,000 BALLS (SE
6
a UNIT SALES TO ATTAIN TARGET PROFIT ( TARGET PROFIT+FIXEDEXPENSES)÷ UNIT CONTRIBUT
UNIT SALES TO ATTAIN TARGET PROFIT ( $90,000+$420,000)÷$16
UNIT SALES TO ATTAIN TARGET PROFIT 31875 BALLS

THUS, THE COMPANY WILL HAVE TO SELL 1,875 MORE BALLS (31,875-30000= 1,875 )THAN NOW BEIGN SOLD TO EA
6
b THE CONTRIBUTION INCOME STATEMENT WOULD BE :
SALES ( 30,000 BALLS X $ 25 PER BALL) 750000
VARIABLE EXPENSES ( 30000 BALLS X $9 PER BALL) 270000
CONTRIBUTION MARGIN 480000
FIXED EXPENSES 420000
NET OPERATING INCOME 60000

THE DGREE OF OPERATING LEVERAGE IS:

DEGREE OF OPERATING LEVERAGE ( CONTRIBUTION MARGIN ÷NET OPERATING INCOME)
DEGREE OF OPERATING LEVERAGE ($48,000÷$60,000)
DEGREE OF OPERATING LEVERAGE 8

C THIS PROBLEM ILLUSTRATE THE DIFFCULTY FACED BY SOME COMPANIES . WHEN VARIABLE LABOR COST INCREASE

THERE IS NO CLEARE ANSWER AS TO WHETHER ONE SHOULD HAVE BEEN IN FAVOR OF CONSTRUCTING NE W PLAN
NIT CONTRIBUTIONS MARGIN)

ARGIN ÷NET OPERATING INCOME)

NIT CONTRIBUTIONS MARGIN)

XED UNIT CONTRIBUTION MARGIN))

57 BALLS (42,857 BALLS, LESS 30,000 BALLS CURRENTLY BEIGN SOLD) TO EARN SAME AMOUNT OF NET OPERATING INCOME AS LAST YEAR

ILL JUST BREAK EVEN IF IT SELLS THE SAME NUMBER OF BALLA (30,000) AS IT DID LAST YEAR

E NEW SELLING PRICE, THEN

WOULD REQUIRE A $5 INCREASE IN THE SELLING PRICE.

NIT CONTRIBUTIONS MARGIN)

BREAK-EVEN OF 21,000 BALLS (SEE PART-1 ABOVE) , IT IS LESS THAN THE BREAK-EVEN POINT WILL BE IF THE COMPANY DOES NOT AUTOM

XEDEXPENSES)÷ UNIT CONTRIBUTION MARGIN

75 )THAN NOW BEIGN SOLD TO EARN APROFIT OF $ 90,000 PER YEAR. HOWEVER, THIS IS STILL LESS THAN THE 42,875 BALLS THAT WOULD

ARGIN ÷NET OPERATING INCOME)

VARIABLE LABOR COST INCREASE , IT IS OFTEN DIFFUCULT TO PASS THESE COST INCREASES ALONG TO CUSTOMERS IN THE FORM OF HIG

OR OF CONSTRUCTING NE W PLANT.
RATING INCOME AS LAST YEAR. THE COMPUTATIONS ABOVE AND IN PART (2) SHOW THE DRAMATIC EFFECT THAT INCREASES IN VARIABL
E COMPANY DOES NOT AUTOMATE AND VARIABLE LABOR COST RISE NEXT YEAR (SEE PART-2 ABOVE)H THIS NEW BREAK-EVEN

HE 42,875 BALLS THAT WOULD HAVE TO BE SOLD TO EARN $90,000 PROFIT IF THE PLANT IS NOT AUTOMATED AND VARIABLE LABOR COS

TOMERS IN THE FORM OF HIGHER OPERATING LEVERAGE , OFTEN A HIGHER BREAK-EVEN POINT AND GREATER RISK FOR THE COMPANY
T THAT INCREASES IN VARIABLE COST CAN HAVE ON AN ORGANIZATION. THE EFFECTS ON NORTHWOOD COMPANY ARE SUMMARIZED BE
NEW BREAK-EVEN

ED AND VARIABLE LABOR COSTS RISE NEXT YEAR (SEE PART-3 ABOVE)

TER RISK FOR THE COMPANY

MPANY ARE SUMMARIZED BELOW
1 THE CONTRIBUTION MARGIN PER SWESTSHIRT WOULD BE:
SELLING PRICE $13.50
VARIABLE EXPENSES
PURCHASE COST OF SWEATSHIRTS 8
COMMISSION TO THE STUDENT SALES PERSON 1.5 9.50

CONTRIBUTION MARGIN $4.00

SINCE THERE ARE NO FIXED COSTS, THE NUMBER OF UNITS SALES NEEDED TO YIELD THE DESIRED $ 1,200 IN PROFI

( TARGET PROFIT÷UNIT CONTRIBUTIONS MARGIN)

($1,200÷$4.00)
$300.00 SWEATSHIRTS
IN TOTAL SALES $4,050.00 ( 300 SWEATSHIRTS X $13.50 PER SWEATSH

2 SINCE AN ORDER HAS BEEN PLACED, THERE IS NOW A "FIXED" COST ASSOCIATED WITH THE PURCAHSED PRICE OF

SELLING PRICE $13.50

VARIABLE EXPENSES ( COMMISSIONS ONLY) 1.5
CONTRIBUTION MARGIN $12.00

SINCE THE FIXED COST OF $600 MUST BE RECOVERED BEFORE MR. HOPPER SHOWS ANY PROFIT , THE BREAK-EVEN

UNIT SALES TO BREAK-EVEN

UNIT SALES TO BREAK-EVEN
UNIT SALES TO BREAK-EVEN

IN TOTAL SALES
IN TOTAL SALES

IF A QUANTITY OTHER THAN 75 SWEATSHIRTS WERE ORDERED , THE ANSWER WOULD CHANGE ACCORDINGLY
DED TO YIELD THE DESIRED $ 1,200 IN PROFITS CAN BE OBTAINED BY DIVIDING THE TARGET $1,200 PROFIT BY THE UNIT CONTRIBUTION M

( 300 SWEATSHIRTS X $13.50 PER SWEATSHIRT)

SSOCIATED WITH THE PURCAHSED PRICE OF THE SWEATSHIRT (I.E. THE SWESTSHIRTS CAN’T BE RETURNED) . FOR EXAMPLE AN ORDER OF

PPER SHOWS ANY PROFIT , THE BREAK-EVEN COMPUTATIONS WOULD BE:

(FIXED EXPENSES ÷UNIT CONTRIBUTIONS MARGIN)

($600÷$12.00)
50.00 SWEATHSIRTS

50 SWEAT SHIRTS X $13.5 PER SWEATSHIRT

$675.00

NSWER WOULD CHANGE ACCORDINGLY

 THE UNIT CONTRIBUTION MARGIN.

FOR EXAMPLE AN ORDER OF 75 SWESTSHIRTS REQUIRES A "FIXED" COST (INVESTMENT) OF $600 (=75 SWEATSHIRTS X $8.00 PER SWESTSH
TSHIRTS X $8.00 PER SWESTSHIRT) THE VARIABLE COST DROPS TO ONLY $1.50 PER SWEATSHIRT, AND THE NEW CONTRIBUTION MARGIN
NEW CONTRIBUTION MARGIN PER SWEATSHIRT BECOMES: