Required Information [The following information applies to the questions displayed below.) Hudson Co. reports the...
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Required Information [The following information applies to the questions displayed below.) Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. contribution Margin Income statement For Year Ended December 31, 2019 Sales (11,200 units at $280 each) Variable costs (11,200 units at $210 each) Contribution margin Fixed costs Pretax income $3,136,000 2,352,000 784,000 567,000 $ 217,000 The marketing manager believes that increasing advertising costs by $188,000 in 2020 will increa volume to 12,600 units. Prepare a forecasted contribution margin Income statement for 2020 ass additional advertising costs. HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Sales S Variable costs Contribution margin Fixed costs Income (pretax)Loss S Should the company incur the additional advertising costs? 3,136.000 2.240,000 896.000 604.500 291,500 Yes
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