Wednesday 7 February 2018

Hudson Co. reports the contribution margin income statement for 2015. Assume sales remain constant at 9,900 units


Hudson Co. reports the contribution margin income statement for 2015. Assume sales remain constant at 9,900 units HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (9,900 units at $239 each) $ 2,366,100 Variable costs (9,900 units at $190 each) 1,881,000 Contribution margin $ 485,100 Fixed costs 326,700 Pretax income $ 158,400 Assume the company is considering investing in a new machine that will increase its fixed costs by $42,000 per year and decrease its variable costs by $9 per unit. Prepare a forecasted contribution margin income statement for 2016 assuming the company purchases this machine.

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