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Hudson Co. reports the contribution margin income statement for 2015. Assume sales remain constant at 10,300 units. HUDSON CO. Contribution Margin Income Statement For Year

Hudson Co. reports the contribution margin income statement for 2015. Assume sales remain constant at 10,300 units.

HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2015
Sales (10,300 units at $259 each) $ 2,667,700
Variable costs (10,300 units at $210 each) 2,163,000
Contribution margin $ 504,700
Fixed costs 330,300
Pretax income $ 174,400

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 2016 assuming the company purchases this machine.

Should the company purchase the machine?
Yes
No

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