Required information The following information applies to the questions displaye

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Required information The following information applies to the questions displayed below. Hudson Co. reports the contribution margin income statement for 2017 HUDSON CO Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (10,400 units at $280 each) Variable costs (10,400 units at $210 each) Contribution margin Fixed costs Pretax income $2,912,000 2,184, 000 $ 728,000 67.000 $ 161,000 If the company raises its selling price to $300 per unit. 1. Compute Hudson Co.s contribution margin per unit. 2. Compute Hudson Co's contribution margin ratio 3. Compute Hudson Co.'s break-even point in units. 4. Compute Hudson Co's break-even point in sales dollars. 1. Contribution margin 2. Contribution margin ratio 3. Break-even point 4. Break-even sales dollars per unit units

Explanation / Answer

1 Contribution margin                                          90 Per Unit 2 Contribution margin ratio                                          30 % 3 Break-even point                                    6,300 Units 4 Break-even Sales Dollar                            18,90,000 Contribution margin                                          90 936000/10400 Contribution margin ratio                                          30 Contribution margin per unit / Sales per unit 90/300 Break-even point                                    6,300 Fixed cost / Contribution per unit 567000 / 90 Fixed cost / Contribution Margin ratio                            18,90,000 567000/30%

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