Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,100 units at $300 each) Variable costs (10, 100 units at $240 each) Contribution margin Fixed costs Pretax income $3,030,000 2,424, eee 606,000 468,000 $ 138,000 Assume the company is considering investing in a new machine that will increase its fixed costs by $43,000 per year and decrease its variable costs by $8 per unit. Prepare a forecasted contribution margin income statement for 2020 assuming the company purchases this machine HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Sales Variable costs Contribution margin Fixed costs Income (pretaxyLoss $ Should the company purchase the machine? 0 0 Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,100 units at $300 each) Variable costs (10,100 units at $240 each) Contribution margin Fixed costs Pretax income $3,030,000 2,424,000 606,080 468,000 $ 138,000 If the company raises its selling price to $320 per unit. 1. Compute Hudson Co's contribution margin per unit. 2. Compute Hudson Co.'s contribution margin ratio. 3. Compute Hudson Co.'s break-even point in units. 4. Compute Hudson Co.'s break-even point in sales dollars. 1 2 3. 4 Contribution margin Contribution margin ratio Break-even point Break-even sales dollars per unit % units Hudson Co. reports the contribution margin income statement for 2019 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,100 units at $300 each) Variable costs (10,100 units at $240 each) Contribution margin Fixed costs Pretax income $3.030.000 2,424,00 606,000 460,000 $ 138,000 The marketing manager believes that increasing advertising costs by S101,000 in 2020 will increase the company's sales volume to 11,500 units. Prepare a forecasted contribution margin income statement for 2020 assuming the company incurs the additional advertising costs. HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Sales Variable costs Contribution margin Fixed costs Income (prelaxLoss Should the company incur the additional advertising costs
