U-Crack-Me-Up Windows, a Manufacturer of Windows, Is Experiencing a Bottleneck

U-Crack-Me-Up Windows, a manufacturer of windows, is experiencing a bottleneck in its plant.Setup time at one of its workstations has been identified as the culprit.A manager has proposed a plan to reduce setup time at a cost of $54,000.The change will result in 800 additional windows.The selling price per window is $180, direct labour costs are $60 per window, and the cost of direct materials is $95 per window.Assume all units produced can be sold.Required:
Determine the change in both contribution margin and throughput contribution from making the investment.Should the investment be made? Justify your answer.

Correct Answer:

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Contribution margin = ($180 - $60 - $95)...

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