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Blanchard Company manufactures a single product that sells for $160 per unit and whose total variable costs are $120 per unit. The company's annual fixed

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Blanchard Company manufactures a single product that sells for $160 per unit and whose total variable costs are $120 per unit. The company's annual fixed costs are $629,000. The sales manager predicts that annual sales of the company's product will soon reach 39,900 units and its price will increase to $199 per unit. According to the production manager, variable costs are expected to increase to $139 per unit, but fixed costs will remain at $629,000. The income tax rate is 25%. 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 S per unit Sales $ 160 Variable cost 120 Contribution margin 0 Units Sales $ per unit 160 120 0 Nariable cost Contribution margin Contribution margin Fixed costs Income before taxes Income taxes 0 $ nces

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