Sunn Company manufactures a single product that sells for $110 per unit and whose variable costs are $125 per unit. The company's annual fixed costs are $620,000. The sales manager predicts that next year's annual sales of the company's product will be 39,000 units at a price of $190 per unit. Variable costs are predicted to increase to $130 per unit, but fixed costs will remain at $620,000. What amount of income can the company expect to earn under these predicted changes? Prepare a contribution margin income statement for the next year. SUNN COMPANY Contribution Margin Income Statement Contribution margin Units $ per unit
Sunn Company manufactures a single product that sells for $110 per unit and whose variable costs are $125 per unit. The company's annual fixed costs are $620,000. The sales manager predicts that next year's annual sales of the company's product will be 39,000 units at a price of $190 per unit. Variable costs are predicted to increase to $130 per unit, but fixed costs will remain at $620,000. What amount of income can the company expect to earn under these predicted changes? Prepare a contribution margin income statement for the next year. SUNN COMPANY Contribution Margin Income Statement Contribution margin Units $ per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Sunn Company manufactures a single product that sells for $110 per unit and whose variable costs are $125 per unit. The company's
annual fixed costs are $620,000. The sales manager predicts that next year's annual sales of the company's product will be 39,000
units at a price of $190 per unit. Variable costs are predicted to increase to $130 per unit, but fixed costs will remain at $620,000. What
amount of income can the company expect to earn under these predicted changes?
Prepare a contribution margin income statement for the next year.
SUNN COMPANY
Contribution Margin Income Statement
Contribution margin
Units
$ per unit
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