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?