Question: Hudson Co. reports the contribution margin income statement for 2015. Assume sales remain constant at 10,300 units. HUDSON CO. Contribution Margin Income Statement For Year

Hudson Co. reports the contribution margin income statement for 2015. Assume sales remain constant at 10,300 units. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (10,300 units at $259 each) Variable costs (10,300 units at $210 each) $ 2,667,700 2,163,000 $ Contribution margin Fixed costs 504,700 330,300 Pretax income 174,400 Assume the company is considering investing in a new machine that will increase its fixed costs by $44,000 per year and decrease its variable costs by $10 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 0 Fixed costs Income (pretax) $ 0
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