Blanchard Company manufactures a single product that sells for $200 per unit and whose total variable costs are $148 per unit. The company's annual fixed costs are $640,000. The sales manager predicts that annual sales of the company's product will soon reach 41,000 units and its price will increase to $210 per unit. According to the production manager, variable costs are expected to increase to $150 per unit, but fixed costs will remain at $640,000. The income tax rate is 20%. 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
Blanchard Company manufactures a single product that sells for $200 per unit and whose total variable costs are $148 per unit. The company's annual fixed costs are $640,000. The sales manager predicts that annual sales of the company's product will soon reach 41,000 units and its price will increase to $210 per unit. According to the production manager, variable costs are expected to increase to $150 per unit, but fixed costs will remain at $640,000. The income tax rate is 20%. 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
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EA: Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of...
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![Blanchard Company manufactures a single
product that sells for $200 per unit and whose
total variable costs are $148 per unit. The
company's annual fixed costs are $640,000. The
sales manager predicts that annual sales of the
company's product will soon reach 41,000 units
and its price will increase to $210 per unit.
According to the production manager, variable
costs are expected to increase to $150 per unit,
but fixed costs will remain at $640,000. The
income tax rate is 20%. 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef39d20f-07dc-4e3f-bde0-4590ef91b9e6%2F48f28ced-2aac-4a53-b6e3-e1002b92fdfd%2F3pvmtsl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Blanchard Company manufactures a single
product that sells for $200 per unit and whose
total variable costs are $148 per unit. The
company's annual fixed costs are $640,000. The
sales manager predicts that annual sales of the
company's product will soon reach 41,000 units
and its price will increase to $210 per unit.
According to the production manager, variable
costs are expected to increase to $150 per unit,
but fixed costs will remain at $640,000. The
income tax rate is 20%. 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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