Prepare a contribution margin income statement for next year

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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 (10,700 units at $300 each) $3,210,000

Variable costs (10,700 units at $240 each) 2,568,000

Contribution margin 642,000

Fixed costs 504,000

Income $138,000

The marketing manager believes that increasing advertising costs by $98,000 will increase the company's sales volume to 12,100 units. Prepare a contribution margin income statement for the next year assuming the company incurs the additional advertising costs.

Reference no: EM133061401

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