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Hudson Co. reports the contribution margin income statement for 2019. The marketing manager believes that increasing advertising costs by $110,000 in 2020 will increase the
Hudson Co. reports the contribution margin income statement for 2019.
The marketing manager believes that increasing advertising costs by $110,000 in 2020 will increase the companys sales volume to 12,000 units. Prepare a forecasted contribution margin income statement for 2020 assuming the company incurs the additional advertising costs.
HUDSON Co. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10, 600 units at $300 each) Variable costs (10,600 units at $240 each) Contribution margin Fixed costs Pretax income $3,180,000 2,544,000 636,000 480,000 $ 156,000 HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Sales Variable costs Contribution margin Fixed costs Income (pretax)/Loss Should the company incur the additional advertising costsStep by Step Solution
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