Blanchard Company manufactures a single product that sells for $136 per unit and whose total variable costs are $102 per unit. The companys annual fixed costs are $626,000. The sales manager predicts that annual sales of the companys product will soon reach 39,600 units and its price will increase to $196 per unit. According to the production manager, variable costs are expected to increase to $136 per unit, but fixed costs will remain at $626,000. The income tax rate is 40%. 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 $ 0 $ 0