Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $176 per unit. The companys annual fixed costs are $631,000. The sales manager predicts that annual sales of the companys product will soon reach 40,100 units and its price will increase to $201 per unit. According to the production manager, variable costs are expected to increase to $141 per unit, but fixed costs will remain at $631,000. 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	$ per unit
Sales
Variable cost
Contribution margin			0
Fixed costs
Income before taxes			$0
Income taxes
Net income			$0