55 [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 (10,000 units at $300 each) Variable costs (10,000 units at $240 each) Contribution margin Fixed costs Income $ 3,000,000 2,400,000 600,000 420,000 $ 180,000 5 Exercise 18-18 (Algo) Evaluating strategies-price increase LO C2 If the company raises its selling price to $320 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. 1. Contribution margin 2. Contribution margin ratio 3. Break-even point 4. Break-even sales dollars per unit units HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (10,000 units at $300 each) Variable costs (10,000 units at $240 each) Contribution margin Fixed costs Income $ 3,000,000 2,400,000 600,000 420,000 $ 180,000 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 $42,500 per year and decrease its variable costs by $10 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases this machine. Sales HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Variable costs Contribution margin Fixed costs Income/Loss