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rosijanka [135]
4 years ago
8

The marketing manager believes that increasing advertising costs by $74,000 in 2020 will increase the company’s sales volume to

12,700 units. Prepare a forecasted contribution margin income statement for 2020 assuming the company incurs the additional advertising costs.
Business
1 answer:
serious [3.7K]4 years ago
4 0

Answer:

Instructions are below.

Explanation:

Giving the following information:

The marketing manager believes that increasing advertising costs by $74,000 in 2020 will increase the company’s sales volume to 12,700 units.

<u>We weren't provided with enough information to solve the requirement. But, I will provide the general structure:</u>

<u></u>

Sales= (number of units*selling price per unit)=

Total variable cost= (total variable cost per unit*number of units)=

Contribution margin=

Fixed costs= (fixed costs + incremental fixed costs)=

Net operating income

<u>If we want to determine the effect on income without an income statement:</u>

Effect of income= incremental units*contribution margin - incremental fixed costs

Contribution margin= selling price - unitary variable cost

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