Refer to the information in Exercise 21-11. The company is considering buying a new machine that will
Question:
Refer to the information in Exercise 21-11. The company is considering buying a new machine that will increase its fixed costs by $40,500 per year and decrease its variable costs by $9 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases this machine.
Data From Exercise 21-11
Hudson Co. reports the following contribution margin income statement. Compute
(1) Break-even point in units and
(2) Break-even point in sales dollars.
Transcribed Image Text:
Contributlon Margin Income Statement For Year Ended December 31 Sales (9,600 units at $225 each).... Variable costs (9,600 units at $180 each)...... $2,160,000 1,728,000 Contribution margin .. 432,000 Fixed costs 324,000 Income.. $ 108,000
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