Question
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,000 units
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,000 units at $300 each) Variable costs (10,000 units at $240 each) Contribution margin Fixed costs Pretax income $3,000,000 2,400,000 600,000 480,000 120,000 1. Compute the company's degree of operating leverage for 2019. 2. If sales decrease by 6% in 2020, what will be the company's pretax income? 3. Assume sales for 2020 decrease by 6%. Prepare a contribution margin income statement for 2020. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the company's degree of operating leverage for 2019. (Round your answer to 1 decimal place.) Degree of operating leverage Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (10,000 units at $300 each) Variable costs (10,000 units at $240 each) Contribution margin Fixed costs Pretax income $3,000,000 2,400,000 $ 600,000 480,000 $ 120,000 1. Compute the company's degree of operating leverage for 2019. 2. If sales decrease by 6% in 2020, what will be the company's pretax income? 3. Assume sales for 2020 decrease by 6%. Prepare a contribution margin income statement for 2020. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 If sales decrease by 6% in 2020, what will be the company's pretax income? Pretax income Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume sales for 2020 decrease by 6%. Prepare a contribution margin income statement for 2020. HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Sales Variable costs Contribution margin Fixed costs Income (pretax)
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