Required $1$

Prepare a contribution margin income statement for next year assuming the company lowers the sales price per unit to $$39$

and increases advertising costs by $$11,100.$

Contribution Margin Income Statement

For Year Ended December $31$

Fixed costsA company reports the following contribution margin income statement for this year. For next year, if the unit sales price is reduced to $$39$ and advertising is increased by $$11,100,$ sales will increase from $4,900$ to $6,900$ units.

Contribution Margin Income Statement

For Year Ended December $31$

Sales $(4,900\backslash$times $$43)$ $ $210,700$

Variable costs $(4,900\backslash$times $$20)98,000$

Contribution margin $112,700$

Fixed costs $44,100$

Income $ $68,600$