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[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 (9,700 units at $280 each)	$	2,716,000
Variable costs (9,700 units at $210 each)		2,037,000
Contribution margin		679,000
Fixed costs		441,000
Pretax income	$	238,000

Exercise 18-16 Break-even LO P2

1. Compute Hudson Co.'s break-even point in units. 2. Compute Hudson Co.'s break-even point in sales dollars.

Required information

Use the following information for the Exercises below.

Skip to question

[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 (9,700 units at $280 each)	$	2,716,000
Variable costs (9,700 units at $210 each)		2,037,000
Contribution margin		679,000
Fixed costs		441,000
Pretax income	$	238,000

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 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.)

Hudson Co. reports the contribution margin income statement for 2019.

HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2019
Sales (9,700 units at $280 each)	$	2,716,000
Variable costs (9,700 units at $210 each)		2,037,000
Contribution margin		679,000
Fixed costs		441,000
Pretax income	$	238,000

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 2020 assuming the company purchases this machine.

Hudson Co. reports the contribution margin income statement for 2019.

HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2019
Sales (9,700 units at $280 each)	$	2,716,000
Variable costs (9,700 units at $210 each)		2,037,000
Contribution margin		679,000
Fixed costs		441,000
Pretax income	$	238,000

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 2020 assuming the company purchases this machine.

Sales

Variable Costs

Contribution Margin

Fixed Cost

Income (pretax)/loss

Should the company purchase the machine

f 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.

The marketing manager believes that increasing advertising costs by $200,000 in 2020 will increase the companys sales volume to 11,100 units. Prepare a forecasted contribution margin income statement for 2020 assuming the company incurs the additional advertising costs

Sales

Variable Cost

Contribution Margin

Fixed Costs

Income (pretax)/loss

Should the company incur the additional advertising costs