Sunn Company manufactures a single product that sells for $160 per unit and whose variable costs are $134 per unit. The companys annual fixed costs are $629,000. The sales manager predicts that next years annual sales of the companys product will be 39,900 units at a price of $199 per unit. Variable costs are predicted to increase to $139 per unit, but fixed costs will remain at $629,000. What amount of income can the company expect to earn under these predicted changes?

Prepare a contribution margin income statement for the next year.

\begin{tabular}{|l|c|r|r|} \hline \multicolumn{2}{|c|}{ SUNN COMPANY } \\ \hline \multicolumn{2}{|c|}{ Contribution Margin Income Statement } \\ \hline & Units & \$ per unit & \\ \hline Sales & & & \\ \hline \hline Variable costs & & & \\ \hline Contribution margin & & & \\ \hline Fixed costs & & & 0 \\ \hline Income & & & 629,000 \\ \hline \end{tabular}