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Required information [The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin
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[The following information applies to the questions displayed below.]
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 | |
The marketing manager believes that increasing advertising costs by $98,000 in 2018 will increase the companys sales volume to 12,100 units. Prepare a forecasted contribution margin income statement for 2018 assuming the company incurs the additional advertising costs.
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