Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 2019 HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 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 Exercise 21-17 Target income and margin of safety (in dollars) LO C2 1. Assume Hudson Co. has a target pretax income of $165,000 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 on percent)? (Round your answer to 1 decimal place.) 1 Amount of sales Margin of 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 2020 assuming the company purchases this machine HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Sales Variable costs Contribution margin Fbced costs Income (pretax)/LOSS Should the company purchase the machine? 1. Compute Hudson Co.'s break-even point in units. 2. Compute Hudson Co.'s break-even point in sales dollars. units Break-even point Break-even point
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started