Hudson Co. Contribution margin Income Statement - For year ended December 31, 2017: 1.Compute the companys degree of operating leverage for 2017. 2. If sales decrease by 4% in 2018, what will be the companys pretax income? 3. Assume sales for 2018 decrease by 4%. Prepare a contribution margin income statement for 2018.

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The following information applies to the questions displayed below) Hudson Co. reports the contribution margin income statement for 2017 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (10,300 units at $375 each) $3,862,500 Variable costs (10,300 units at $300 each) 3,990,000 Contribution margin $ 772,500 Fixed costs 600,000 Pretax income $ 172,500 Assume the company is considering investing in a new machine that will increase its fixed costs by $44.000 per year and decrease its variable costs by $10 per unit. Prepare a forecasted contribution margin income statement for 2018 assuming the company purchases this machine HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2018 Variable costs Contribution margin Faced costs Income (pretac) Should the company purchase the machine? Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (11,000 units at $175 each) Variable costs (11,000 units at $140 each) $1,925,000 Contribution margin 1,540,000 Fixed costs $ 385,000 Pretax income 315,000 $ 70,000 1. Compute the company's degree of operating leverage for 2017. 2. If sales decrease by 4% in 2018, what will be the company's pretax income? 3. Assume sales for 2018 decrease by 4%. Prepare a contribution margin income statement for 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3