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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 2017.
HUDSON CO. | |||
Contribution Margin Income Statement | |||
For Year Ended December 31, 2017 | |||
Sales (9,800 units at $280 each) | $ | 2,744,000 | |
Variable costs (9,800 units at $210 each) | 2,058,000 | ||
Contribution margin | $ | 686,000 | |
Fixed costs | 504,000 | ||
Pretax income | $ | 182,000 | |
\Assume the company is considering investing in a new machine that will increase its fixed costs by $41,500 per year and decrease its variable costs by $8 per unit. Prepare a forecasted contribution margin income statement for 2018 assuming the company purchases this machine.
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