Prepare a forecasted contribution margin income statement

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Question - Blanchard Company manufactures a single product that sells for $190 per unit and whose total variable costs are $180 per unit. The company's annual fixed costs are $639,000. The sales manager predicts that annual sales of the company's product will soon reach 40,900 units and its price will increase to $209 per unit. According to the production manager, variable costs are expected to increase to $149 per unit, but fixed costs will remain at $639,000. The income tax rate is 40%. What amounts of pretax and after-tax income can the company expect to earn from these predicted changes?

Prepare a forecasted contribution margin income statement.

Reference no: EM132557503

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