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Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (10,700 units

Hudson Co. reports the contribution margin income statement for 2017.

HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales (10,700 units at $300 each) $ 3,210,000
Variable costs (10,700 units at $240 each) 2,568,000
Contribution margin $ 642,000
Fixed costs 504,000
Pretax income $ 138,000

Exercise 21-17 Target income and margin of safety (in dollars) LO C2

1. Assume Hudson Co. has a target pretax income of $161,000 for 2018. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax income for 2018, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.)

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