Blanchard Company manufactures a single product that sells for $160 per unit and whose total variable costs are $128 per unit. The companys annual fixed costs are $625,000. The sales manager predicts that annual sales of the companys product will soon reach 39,500 units and its price will increase to $195 per unit. According to the production manager, the variable costs are expected to increase to $135 per unit but fixed costs will remain at $625,000. The income tax rate is 20%. 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