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, 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 Fixed costs Income before taxes Income taxes
Contribution margin Fixed costs Income before taxes Income taxes Net Income Sales Variable cost
Contribution margin
Contribution margin Fixed costs Income before taxes Income taxes Net Income Sales Variable cost
Contribution margin Fixed costs Income before taxes Income taxes Net Income Sales Variable cost					$
Contribution margin Fixed costs Income before taxes Income taxes Net Income Sales Variable cost
Contribution margin Fixed costs Income before taxes Income taxes Net Income Sales Variable cost					$