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Blanchard Company manufactures a single product that sells for $120 per unit and whose total...

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Accounting

Blanchard Company manufactures a single product that sells for $120 per unit and whose total variable costs are $90 per unit. The companys annual fixed costs are $624,000. The sales manager predicts that annual sales of the companys product will soon reach 39,400 units and its price will increase to $194 per unit. According to the production manager, variable costs are expected to increase to $134 per unit, but fixed costs will remain at $624,000. The income tax rate is 25%. What amounts of pretax and after-tax income can the company expect to earn from these predicted changes? Prepare a forecasted contribution margin income statement.

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