Hudson Co. reports the contribution margin income statement for 2019 below. Contribution Margin Income StatementFor Year Ended December 31, 2019Sales (9,600 units at $225 each) . . . . . . . . . . . . . . . . . . . . $2,160,000Variable costs (9,600 units at $180 each) . . . . . . . . . . . . . 1,728,000Contribution margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432,000Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324,000Pretax income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 108,000 The marketing manager believes that increasing advertising costs by $81,000 in 2020 will increase the company’s sales volume to 11,000 units. Prepare a forecasted contribution margin income statement for 2020 assuming the company incurs the additional advertising costs.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Hudson Co. reports the contribution margin income statement for 2019 below. Contribution Margin Income Statement
For Year Ended December 31, 2019
Sales (9,600 units at $225 each) . . . . . . . . . . . . . . . . . . . . $2,160,000
Variable costs (9,600 units at $180 each) . . . . . . . . . . . . . 1,728,000
Contribution margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432,000
Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324,000
Pretax income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 108,000 The marketing manager believes that increasing advertising costs
by $81,000 in 2020 will increase the company’s sales volume to 11,000 units. Prepare a forecasted contribution
margin income statement
for 2020 assuming the company incurs the additional advertising costs.

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