Hudson Co. reports contribution margin income statement for 2017.

HUDSON CO.
Contribution Share Income Statement
For the Year Ended 31 December 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
income before tax	$	103.500

Suppose the company is considering investing in a new machine that will increase its fixed costs by $42,000 per year and reduce its variable costs by $9 per unit. Prepare an estimated contribution income statement for 2018, assuming the company has purchased this machine.

HUDSON CO.
Projected Contribution Margin Income Statement
For the Year Ended 31 December 2018
Sales
Variable prices
Contribution margin	0
Fixed costs
Income (before tax)	0 $
Should the company buy the machine?

If the company raises the selling price to $240 per unit.

1. Calculate Hudson Co.'s contribution margin per unit.
2. Calculate Hudson Co.'s contribution margin ratio.
3. Calculate Hudson Co.'s breakeven point in units.
4. Calculate Hudson Co.'s breakeven point in sales dollars.

The marketing manager believes that increasing advertising costs by $84,000 in 2018 will increase the company's sales volume to 11,300 units. Prepare an estimated contribution margin income statement for 2018, assuming the company will incur additional advertising costs.

HUDSON CO.
Projected Contribution Margin Income Statement
For the Year Ended 31 December 2018
Sales
Variable prices
Contribution margin	0
Fixed costs
Income (before tax)	0 $
Should the company incur additional advertising costs?