[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 (9,900 units at $225 each)	$	2,227,500
Variable costs (9,900 units at $180 each)		1,782,000
Contribution margin	$	445,500
Fixed costs		342,000
Pretax income	$	103,500

2 ! Part 1 of 5 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. 0.88 points eBook HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (9,900 units at $225 each) $2,227,500 Variable costs (9,900 units at 1,782,000 $180 each) Contribution margin $ 445,500 Fixed costs 342,000 Pretax income $ 103,500 Hint Print Exercise 18-16 Break-even LO P2 References 1. Compute Hudson Co.'s break-even point in units and. 2. Compute Hudson Co.'s break-even point in sales dollars. 1. units Break-even Ipoint Break-even point 2. 1. Assume Hudson Co. has a target pretax income of $165,000 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.) Amount of 1. sales Margin of 2. safety % Assume the company is considering investing in a new machine that will increase its fixed costs by $42,000 per year and decrease its variable costs by $9 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 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. per unit % 1. Contribution margin Contribution margin 2. ratio 3. Break-even point Break-even sales 4. dollars units The marketing manager believes that increasing advertising costs by $84,000 in 2018 will increase the company's sales volume to 11,300 units. Prepare a forecasted contribution margin income statement for 2018 assuming the company incurs the additional advertising costs. 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 incur the additional advertising costs? 0 $ 0