Question

value: 2.40 points Hudson Co. reports the contribution margin income statement for 2015. Assume sales remain constant at 10,100 units. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10,100 units at $249 each) Variable costs (10,100 units at $200 each) $ 2,514,900 2,020,000 $ Contribution margin Fixed costs 494,900 328,500 Pretax income $ 166,400 Assume the company is considering investing in a new machine that will increase its fixed costs by $43,000 per year and decrease its variable costs by $8 per unit. Prepare a forecasted contribution margin income statement for 2016 assuming the company purchases this machine. HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2016 Sales Variable costs Contribution margin Fixed costs Income (pretax)

Answer 1

Answer:
HUDSON CO.
Forecasted Contribution Margin Income Statement
Sales (10100 units at $249 each)	$     2,514,900
Variable costs (10100 units at $192) (200-8=192)	$     1,939,200
Contribution margin	$        575,700
Less:Fixed costs (328500+43000)	$        371,500
Pretax income	$        204,200