Hudson Co. reports the contribution margin income statement for
2019.
HUDSON CO. | |||
Contribution Margin Income Statement | |||
For Year Ended December 31, 2019 | |||
Sales (11,000 units at $300 each) | $ | 3,300,000 | |
Variable costs (11,000 units at $240 each) | 2,640,000 | ||
Contribution margin | 660,000 | ||
Fixed costs | 360,000 | ||
Pretax income | $ | 300,000 | |
The marketing manager believes that increasing advertising costs
by $125,000 in 2020 will increase the company’s sales volume to
12,400 units. Prepare a forecasted contribution margin income
statement for 2020 assuming the company incurs the additional
advertising costs.
Hudson Co.
Forecasted Contribution Margin Income
Statement
For the Year Ending December 31,2020
Particulars | Amount |
Sales Revenue | 37,20,000 |
Variable Costs | 29,76,000 |
Contribution Margin | 7,44,000 |
Fixed Costs | 4,85,000 |
Pretax Income | 2,59,000 |
Supporting Work
Sales Revenue = 12,400 Units * $ 300 per Unit = $ 37,20,000
Variable Costs = 12,400 Units * $ 240 per Unit = $ 29,76,000
Contribution Margin = Sales Revenue - Variable Costs
Fixed Costs = 360,000 + 125,000 (Additional Advertising Costs) = $ 485,000
Pretax Income = Contribution Margin - Fixed Costs
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (11,000 units at $300 each) $ 3,300,000 Variable costs (11,000 units at $240 each) 2,640,000 Contribution margin 660,000 Fixed costs 360,000 Pretax income $ 300,000 1. Compute Hudson Co.'s break-even point in units. 2. Compute Hudson Co.'s break-even point in sales dollars.
Help Hudson Co. reports the contribution margin Income statement for 2019 Save & Exl 15 HUDSON CO. Contribution Margin Income Statement Yor Year Ended December 31, 2019 Sales (11,000 units at $300 each) Variable costs (11,000 units at $240 sach) Contribution margin Fixed costs Pretax income Part 3 of 3 $3,300,000 2,640,000 660,000 360.000 $ 300,000 points If the company raises its selling price to $320 per unit. 8 02:10:56 1. Compute Hudson Co.'s contribution margin per unit. 2. Compute...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (12,000 units at $225 each) $ 2,700,000 Variable costs (12,000 units at $180 each) 2,160,000 Contribution margin $ 540,000 Fixed costs 360,000 Pretax income $ 180,000 1. Compute the company’s degree of operating leverage for 2019. 2. If sales decrease by 4% in 2020, what will be the company’s pretax income? 3. Assume sales for 2020 decrease...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,980 units at $225 each) Variable costs (9,900 units at $180 each) Contribution margin Fixed costs Pretax income $2.227,500 1,782,800 445.500 342.000 $ 103,500 1. Assume Hudson Co. has a target pretax income of $165,000 for 2020. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax...
Required information [The following information applies to the questions displayed below.) Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (11,000 units at $300 each) $3,300,000 Variable costs (11,000 units at $240 each) Contribution margin $ 660,000 Fixed costs 360,000 Pretax income $ 300,000 1. Assume Hudson Co. has a target pretax income of $158,000 for 2018. What amount of sales in dollars) is needed to...
Required Information The following Information applies to the questions displayed below.) Hudson Co. reports the contribution margin Income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,300 units at $375 each) Variable costs (10,300 units at $300 each) Contribution margin Fixed costs Pretax income $3,862,500 3,090, eee 772,500 6ee, eee $ 172,5ee The marketing manager believes that increasing advertising costs by $165,000 in 2020 will increase the company's sales volume to 11,700...
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,800 units at $289 each) Variable costs (9,800 units at $210 each) Contribution margin Fixed costs E Pretax income $2,520,000 1,890,000 $ 630,000 420,000 $ 210,000 1. Compute the company's degree of operating leverage for 2019. 2. If sales decrease by 6% in 2020, what will be the company's pretax income? 3. Assume sales for 2020 decrease...
Required information [The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,500 units at $225 each) Variable costs (10,500 units at $180 each) Contribution margin Fixed costs $2,362,500 1,890,000 472,500 369,000 $ 103,500 Pretax income 1. Compute Hudson Co.'s break-even point in units. 2. Compute Hudson Co.'s break-even point in sales dollars. units 1. Break-even point 2....
14 Required information [The following information applies to the questions displayed below.) Hudson Co. reports the contribution margin income statement for 2019. Part 2 of 3 BUDOON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Salas (11,000 units at $300 each) Variable coste (11,000 units at $240 each) Contribution margin Fixed costs Pretax income $3,300,000 2.640.000 €60.000 360,000 $ 300,000 1. Assume Hudson Co. has a target pretax income of $158,000 for 2020. What amount of sales...
[The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (9,900 units at $225 each) $ 2,227,500 Variable costs (9,900 units at $180 each) 1,782,000 Contribution margin $ 445,500 Fixed costs 342,000 Pretax income $ 103,500 2 ! Part 1 of 5 Required information Use the following information for the Exercises below. [The following information applies to the...