Question
12) Hudson Co. reports the contribution margin income statement for 2015. Assume sales and variable costs per unit remain constant. HUDSON CO. Contribution Margin Income
12)
| Hudson Co. reports the contribution margin income statement for 2015. Assume sales and variable costs per unit remain constant. |
| HUDSON CO. | |||
| Contribution Margin Income Statement | |||
| For Year Ended December 31, 2015 | |||
| Sales (10,200 units at $225 each) | $ | 2,295,000 | |
| Variable costs (10,200 units at $180 each) | 1,836,000 | ||
| Contribution margin | $ | 459,000 | |
| Fixed costs | 329,400 | ||
| Pretax income | $ | 129,600 | |
| The marketing manager believes that increasing advertising costs by $87,000 in 2016 will increase the companys sales volume to 11,600 units. Prepare a forecasted contribution margin income statement for 2016 assuming the company incurs the additional advertising costs. |
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Financial And Managerial Accounting
Authors: Jan R. Williams, Joseph V. Carcello, Mark S. Bettner, Sue Haka, Susan F. Haka
14th International Edition
0071101217, 9780071101219
