This question is worth a total of 14 points. Sony and Micros…

This question is worth a total of 14 points. Sony and Microsoft both plan to introduce a new hand-held video game. Sony plans to use a heavily automated production process to produce its product while Microsoft plans to use a labor-intensive production process.  The following revenue and cost relationships are provided:   Selling price                                    $  100.00                      $  100.00 Variable Unit Data:                       Sony Device               Microsoft Device   Direct materials                                     18.00                            18.00   Direct labor                                              5.00                            20.00   Overhead                                                 5.00                            20.00   Selling and Admin.                                  2.00                              2.00 Annual Fixed Costs:   Overhead                                       $400,000                        $160,000   Selling & Admin.                          $  90,000                            90,000 Required:  (NOTICE THAT THERE ARE THREE (3) QUESTIONS TO THIS PROBLEM!)  1. Compute the contribution margin per unit for each company.   2. Prepare a contribution income statement for each company assuming each company sells 8,000 units. Compute each firm’s net income if the number of units sold increases by 10%.