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Prepare a contribution margin income statement

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Question - Hudson Company reports the following contribution margin income statement.

HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31

Sales (9,600 units at $225 each) $ 2,160,000

Variable costs (9,600 units at $180 each) 1,728,000

Contribution margin 432,000

Fixed costs 324,000

Income $ 108,000

The marketing manager believes that increasing advertising costs by $81,000 will increase the company's sales volume to 11,000 units. Prepare a contribution margin income statement for the next year assuming the company incurs the additional advertising costs.

Reference no: EM133153395

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