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lubasha [3.4K]
2 years ago
15

Assume the company is considering investing in a new machine that will increase its fixed costs by $42,500 per year and decrease

its variable costs by $10 per unit. Prepare a forecasted contribution margin income statement for 2020 assuming the company purchases this machine.
Business
1 answer:
Semenov [28]2 years ago
8 0

Answer:

The company should purchase the machine.

Explanation:

Note: The complete question is attached below

Forecasted contribution margin income statement

For the Year Ended December 31

Particulars                                       Amount$

Sales                                                2,440,000

Variable cost(10,000*185(195-10))  <u>1,850,000</u>

Contribution margin                        590,000

Fixed cost (327,600+42,500)         <u>370,100</u>

Income                                              <u>$219,900</u>

Because the income increase by $57,500 due to the pruchase, the company should purchase the machine

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Answer:

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3 years ago
Sweetpea Corporation sold a tiller that it used in its landscaping business. The tiller cost $5,000 and Sweetpea had taken $2,00
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Answer:

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Ranch Company estimates warranty expense as 5% of sales. On January 1, warranties payable was $13,000. During the year Ranch pai
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Answer:

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2 years ago
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The value of what you own is called you assets. This can include anything of value that you own, particularly your pricier possessions. Think of a vintage family heirloom or a highly–priced article of clothing. Assets, though, includes the value <em>everything</em> that you own that you could possibly put a price tag on if you were certain someone would buy it. 

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