Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019
Sales (9,800 units at $280 each) $ 2,744,000
Variable costs (9,800 units at $210 each) 2,058,000
Contribution margin 686,000
Fixed costs 504,000
Pretax income $ 182,000
Assume the company is considering investing in a new machine that will increase its fixed costs by $41,500 per year and decrease its variable costs by $8 per unit.
We will assume that sales remain the same.
Contribution margin income statement:
Sales= 2,744,000
Variable costs= (202*9,800)= (1,979,600)
Contribution margin= 764,400
Fixed costs= (504,000 + 41,500)= (545,500)
Pretax income= 218,900
