Sunn Company manufactures a single product that sells for $180 per unit and whose variable costs are $135 per unit. The company’s annual fixed costs are $562,500. The sales manager predicts that next year’s annual sales of the company’s product will be 40,000 units at a price of $200 per unit. Variable costs are predicted to increase to $140 per unit, but fixed costs will remain at $562,500. What amount of income can the company expect to earn under these predicted changes?

 Sunn Company manufactures a single product that sells for $180 per unit and whose variable costs are $135 per unit. The company’s annual fixed costs are $562,500. The sales manager predicts that next year’s annual sales of the company’s product will be 40,000 units at a price of $200 per unit. Variable costs are predicted to increase to $140 per unit, but fixed costs will remain at $562,500. What amount of income can the company expect to earn under these predicted changes?

Prepare a contribution margin income statement for the next year.
 

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