A5 4

Blanchard Company manufactures a single product that sells for $200 per unit and whose total variable costs are $192 per unit. The company's annual fixed costs are $633,000. The sales manager predicts that annual sales of the company's product will soon reach 40,300 units and its price will increase to $203 per unit. According to the production manager, variable costs are expected to decrease to $143 per unit, but fixed costs will remain at $633,000. The income tax rate is 35%. What amounts of pretax and after-tax income can the company expect to earn from these predicted changes? Prepare a forecasted contribution margin income statement. BLANCHARD COMPANY Forecasted Contribution Margin Income Statement Units $ per unit Contribution margin