(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 (10,300 units at $375 each) Variable costs (10,300 units at $300 each) Contribution margin Fixed costs Pretax income $3,862,500 3,090,000 $ 772,500 600,000 $ 172,500 Exercise 18-20 Evaluating strategies LO C2 The marketing manager believes that increasing advertising costs by $165,000 in 2018 will increase the company's sales volume to 11,700 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? |