Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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? | ||||
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started