Reference no: EM132502582
Hudson Co.
Contribution margin income statement
For year ended December 31, 2017
Sales (11,500 units at $225 each) $2,587,500
Variable costs (11,500 units at $180 each) $2,070,000
Contribution margin $ 517,500
Fixed costs $360,000
Pretax income $157,500
Problem 1: Assume the company is considering investing in a new machine that will increase its fixed costs by $36,000 per year and decrease its variable costs by $10 per unit. Decide a forecasted contribution margin income statement fro 018 assuming the company purchases this machine.
Income statement
Sales = jQuery2240996547119362366_1582247133837
Variable costs =??
Contribution margin =??
Fixed costs = ???
Income (pretax) =???
Problem 2: Should the company purchase the machine?