e contribution margin income statement
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5PB: Wellington, Inc., reports the following contribution margin income statement for the month of May....
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![Hudson Co. reports the contribution margin income statement for 2019.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2019
Sales (11,000 units at $300 each)
Variable costs (11,000 units at $240 each)
Contribution margin
$3,300, өөө
2,640,000
2$
660,000
360,000
Fixed costs
Pretax income
$300,000
1. Compute the company's degree of operating leverage for 2019.
2. If sales decrease by 5% in 2020, what will be the company's pretax income?
3. Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020.
Complete this question by entering your answers in the tabs below.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Facad9037-64ff-4634-8cfc-408fed18564b%2F63bb332b-020f-433e-b6bb-87119b404a38%2Fdlu820f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Hudson Co. reports the contribution margin income statement for 2019.
HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2019
Sales (11,000 units at $300 each)
Variable costs (11,000 units at $240 each)
Contribution margin
$3,300, өөө
2,640,000
2$
660,000
360,000
Fixed costs
Pretax income
$300,000
1. Compute the company's degree of operating leverage for 2019.
2. If sales decrease by 5% in 2020, what will be the company's pretax income?
3. Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020.
Complete this question by entering your answers in the tabs below.
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