Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For...

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Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,600 units at $225 each) Variable costs (11,600 units at $180 each) Contribution margin Fixed costs Income $ 2,610,000 2,088,000 522,000 315,000 $207,000 Exercise 18-19 (Algo) Evaluating strategies-new machine LO C2 The company is considering buying a new machine that will increase its fixed costs by $35,500 per year and decrease its variable costs by $8 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases this machine. Answer is complete but not entirely correct. HUDSON COMPANY Income Exercise 18-19 (Algo) Evaluating strategies-new machine LO C2 The company is considering buying a new machine that will increase its fixed costs by $35,500 per year and decrease its variable costs by $8 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases this machine. Answer is complete but not entirely correct. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales Variable costs Contribution margin Fixed costs Income/Loss $ 1,800 1,440 x 315,000 $ 207,000 360 315,000 (314,640) Exercise 18-18 (Algo) Evaluating strategies-price increase LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Company's contribution margin per unit. 2. Compute Hudson Company's contribution margin ratio. 3. Compute Hudson Company's break-even point in units. 4. Compute Hudson Company's break-even point in sales dollars. Answer is complete but not entirely correct. 45 Xper unit 20 % 7,000 units 1. Contribution margin 2. Contribution margin ratio 3. Break-even point 4. Break-even sales dollars $ $1,575,000 X Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,600 units at $225 each) Variable costs (11,600 units at $180 each) Contribution margin Fixed costs Income $ 2,610,000 2,088,000 522,000 315,000 $207,000. Exercise 18-18 (Algo) Evaluating strategies-price increase LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Company's contribution margin per unit. 2. Compute Hudson Company's contribution margin ratio. 3. Compute Hudson Company's break-even point in units. 4. Compute Hudson Company's break-even point in sales dollars. [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,400 units at $225 each) Variable costs (11,400 units at $180 each) Contribution margin Fixed costs Income Answer is complete but not entirely correct. 1. Amount of sales 2. Margin of safety Exercise 18-12 (Algo) Target income and margin of safety LO C2 1. Assume Hudson has a target income of $150,000. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) $ 2,550,000 $ 2,565,000 2,052,000 29.2 % 513,000 360,000 $153,000 Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,600 units at $225 each) Variable costs (11,600 units at $180 each) Contribution margin Fixed costs Income $ 2,610,000 2,088,000 522,000 315,000 $207,000 Exercise 18-19 (Algo) Evaluating strategies-new machine LO C2 The company is considering buying a new machine that will increase its fixed costs by $35,500 per year and decrease its variable costs by $8 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases this machine. Answer is complete but not entirely correct. HUDSON COMPANY Income Exercise 18-19 (Algo) Evaluating strategies-new machine LO C2 The company is considering buying a new machine that will increase its fixed costs by $35,500 per year and decrease its variable costs by $8 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases this machine. Answer is complete but not entirely correct. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales Variable costs Contribution margin Fixed costs Income/Loss $ 1,800 1,440 x 315,000 $ 207,000 360 315,000 (314,640) Exercise 18-18 (Algo) Evaluating strategies-price increase LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Company's contribution margin per unit. 2. Compute Hudson Company's contribution margin ratio. 3. Compute Hudson Company's break-even point in units. 4. Compute Hudson Company's break-even point in sales dollars. Answer is complete but not entirely correct. 45 Xper unit 20 % 7,000 units 1. Contribution margin 2. Contribution margin ratio 3. Break-even point 4. Break-even sales dollars $ $1,575,000 X Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,600 units at $225 each) Variable costs (11,600 units at $180 each) Contribution margin Fixed costs Income $ 2,610,000 2,088,000 522,000 315,000 $207,000. Exercise 18-18 (Algo) Evaluating strategies-price increase LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Company's contribution margin per unit. 2. Compute Hudson Company's contribution margin ratio. 3. Compute Hudson Company's break-even point in units. 4. Compute Hudson Company's break-even point in sales dollars. [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,400 units at $225 each) Variable costs (11,400 units at $180 each) Contribution margin Fixed costs Income Answer is complete but not entirely correct. 1. Amount of sales 2. Margin of safety Exercise 18-12 (Algo) Target income and margin of safety LO C2 1. Assume Hudson has a target income of $150,000. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) $ 2,550,000 $ 2,565,000 2,052,000 29.2 % 513,000 360,000 $153,000

Answer rating: 100% (QA)

1 1 Compute Hudson Companys contribution margin per unit The contribution margin per unit can be calculated by subtracting the variable cost per unit from the selling price per unit In this case the v... View the full answer