Prepare new contribution format income statement

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Reference no: EM131580038

Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are 6.00 a unit, and fixed expenses total 180,000 annually. results from last year are as follows:

Sales(24,000 units)............ 360,000

Variable expenses.............144,000

Contribution margin............216,000

Fixed expenses..................180,000

Operating Income..............36,000

Refer to the original data. the sales vice president is convinced that a 10% decrease in the selling price, combined with a 100k incre. in the the marketing expenditures, would increase annual unit sales by 75%. prepare a new contribution format income statement assuming these changes occur. should the company proceed with the changes?

Reference no: EM131580038

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