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 (9, 700 units at $280 each) Variable costs (9, 700 units at $210 each) Contribution margin $2,716,000 2,037,000 679,000 441,000 Fixed costs 238,000 Pretax income Exercise 18-16 Break-even LO P2 1. Compute Hudson Co.'s break-even point in units and. 2. Compute Hudson Co.'s break-even point in sales dollars. Break-even point 1 units Break-even point 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 (9,700 units at $280 each) Variable costs (9,700 units at $210 each) $2,716,000 2,037,000 679,000 441,000 Contribution margin Fixed costs 238,000 Pretax income Exercise 18-18 Evaluating strategies LO C2 Assume the company is considering investing in a new machine that will increase its fixed costs by $41,000 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? 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 $2,716,000 Sales (9,700 units at $280 each) Variable costs (9,700 units at $210 each) Contribution margin 2,037,000 679,000 441,000 Fixed costs 238,000 Pretax income Exercise 18-17 Target income and margin of safety (in dollars) LO C2 1. Assume Hudson Co. has a target pretax income of $163,000 for 2018. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target pretax income for 2018, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) 1 Amount of sales 2 Margin of safety 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 Yea December 31, 2017 $2,716, 000 2,037,000 $ 679,000 441, 000 Sales (9,700 Variable costs (9,700 units at $210 each) Contribution margin Fixed costs 238, 000 Pretax income Exercise 18-19 Evaluating strategies LO C2 If the company raises its selling price to $300 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. Contribution margin 1 per unit Contribution margin ratio 2 % Break-even point units 3 4 Break-even sales dollars
