Chapter 5 Homework Saved Help Sat 3 Part 1 of 3 Use the following information for the Exercises below. (Static) [The following information applies to the questions displayed below) Hudson Company reports the following contribution margin income statement, HUDSON COMPANY Contribution Margin Toome Statement For Year Ended December 31 Sales (9.600 units at $225 each) $ 2,180,000 Variable costs (9.600 units at $100 each) 1.720,000 Contribution margin 32,000 Pixed coats 324.000 Income 100,000 2 ports Bac Exercise 5-17 (Static) Evaluating strategies-advertising LO C2 The marketing manager believes that increasing advertising costs by $81.ooo will increase the company's soles volume to 11.000 units, Prepare a contribution margin income statement for the next year assuming the company incurs the additional advertising costs. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales Variable costs Contribution margin Foxed costs Income Loss $ 0 Exercise 5-18 (Static) Evaluating strategies-price increase LO C2 If the company raises its selling price to $240 per unit. 1. Compute Hudson Company's contribution margin per unit. 2. Compute Hudson Company's contribution margin ratio. 3. Compute Hudson Company's break-even point in units. 4. Compute Hudson Company's break-even point in sales dollars. per unit % 1. Contribution margin 2. Contribution margin ratio 3. Break-even point 4. Break-even sales dollars units Exercise 5-19 (Static) Evaluating strategies-new machine LO C2 The company is considering buying a new machine that will increase its fixed costs by $40,500 per year and decrease its variable costs by $9 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases this machine HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales Variable costs Contribution margin Fixed costs Income Loss