Required information

Use the following information for the Exercises below.

[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 (10,900 units at $225 each)	$	2,452,500
Variable costs (10,900 units at $180 each)		1,962,000
Contribution margin	$	490,500
Fixed costs		387,000
Pretax income	$	103,500

Exercise 21-18 Evaluating strategies LO C2

Assume the company is considering investing in a new machine that will increase its fixed costs by $39,000 per year and decrease its variable costs by $10 per unit. Prepare a forecasted contribution margin income statement for 2018 assuming the company purchases this machine.

HUDSON CO Forecasted Contribution Margin Income Statement For Year Ended December 31, 2018 Sales Variable costs Contribution margin Fixed costs Income (pretax) Should the company purchase the machine? 0 0