Reference no: EM132049717
Question - Hudson Co. reports the contribution margin income statement for 2015. Assume sales and variable costs per unit remain constant.
HUDSON CO. Contribution Margin Income Statement
For Year Ended December 31, 2015
Sales (10,200 units at $225 each) $ 2,295,000
Variable costs (10,200 units at $180 each) 1,836,000
Contribution margin $ 459,000
Fixed costs 329,400
Pretax income $ 129,600
The marketing manager believes that increasing advertising costs by $87,000 in 2016 will increase the company's sales volume to 11,600 units. Prepare a forecasted contribution margin income statement for 2016 assuming the company incurs the additional advertising costs.
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