Blanchard Company manufactures a single product that sells for $120 per unit and whose total variable costs are $84 per unit. The company’s annual fixed costs are $627,000. The sales manager predicts that annual sales of the company’s product will soon reach 39,700 units and its price will increase to $197 per unit. According to the production manager, the variable costs are expected to increase to $137 per unit but fixed costs will remain at $627,000. The income tax rate is 35%. 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.|