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 2019 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,680 units at $225 each) Variable costs (9,6ee units at $180 each) Contribution margin Fixed costs Pretax income $2,160.ee 1.728.ee 432.ee 324,000 $ 108,000 Exercise 05-17 Target income and margin of safety (in dollars) LO C2 1. Assume Hudson Co. has a target pretax income of $162,000 for 2020. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax income for 2020, what is its margin of safety (in percent)? (Round your answer to 1 decimal Help Save & Sales (9.600 units at $225 each) Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Pretax income $2.168. 1,728.000 432.000 324,08 $ 108,000 Exercise 05-17 Target income and margin of safety (in dollars) LO C2 1. Assume Hudson Co. has a target pretax income of $162,000 for 2020. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax income for 2020, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) 1. Amount of sales 2. Margin of safety Check my 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 2019 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,600 units at $225 each) Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Pretax income $2,160.00 1,728,000 432,000 324,000 $ 108, Exercise 05-18 Evaluating strategies LO C2 Assume the company is considering investing in a new machine that will increase its fixed costs by $40.500 per year and decrease its variable costs by $9 per unit. Prepare a forecasted contribution margin income statement for 2020 assuming the company purchases this machine. HUDSON CO. Exercise 05-18 Evaluating strategies LO C2 Assume the company is considering investing in a new machine that will increase its foed costs by $40,500 per year and decrease its variable costs by $9 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? Sales (9,600 units at $225 each) Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Pretax income Contribu.costs (9. set $225 $2.160.ee 1,728,869 432.ee 324,000 $ 108,00 Exercise 05-19 Evaluating strategies LO C2 If the company raises its selling price to $240 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. Contribution margin 2. Contribution margin ratio 3. Break-even point 4. Break-even sales dollars per unit % units Help Pretax income $ 188,009 Exercise 05-20 Evaluating strategies LO C2 The marketing manager believes that increasing advertising costs by $81,000 in 2020 will increase the company's sales volume 11,000 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 (pretax)/Loss Should the company incur the additional advertising costs
