Blanchard Company manufactures a single product that sells for $200 per unit and

Question

Blanchard Company manufactures a single product that sells for $200 per unit and whose total variable costs are $182 per unit. The company’s annual fixed costs are $637,000. The sales manager predicts that annual sales of the company’s product will soon reach 40,700 units and its price will increase to $207 per unit. According to the production manager, variable costs are expected to increase to $147 per unit but fixed costs will remain at $637,000. The income tax rate is 30%. 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.

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Variable cost

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Variable cost

Contribution margin

Fixed costs

Income before taxes

Income taxes

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Variable cost

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Variable cost

BLANCHARD COMPANY Forecasted Contribution Margin Income Statement Units $ per unit

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Variable cost

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Variable cost

Contribution margin

Contribution margin

Fixed costs

Income before taxes

Income taxes

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

$

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Variable cost

Contribution margin

Fixed costs

Income before taxes

Income taxes

Net Income

Sales

Variable cost

$

Explanation / Answer

BLANCHARD COMPANY

Forecasted Contribution Margin Income Statement

Units $ per unit Sales 40,700 $207 $8,424,900 Variable costs 40,700 $147 $5,982,900 Contribution margin 40,700 $60 $2,442,000 Fixed costs $637,000 Income before taxes $1,805,000 Income taxes $541,500 Net income $1,263,500

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.