Brahma industries sells vinyl replacement windows to home improvement retailers nationwide. The national sales manager believes that if they invest an additional $25,000 in advertising, they would increase sales volume by 10,000 units. Prepare a forecasted contribution margin income statement for Brahma if they incur the additional advertising costs, using this information:
Sales (6,500 units at $ 115) $747,500
Variable costs (6,500 units at $ 69) 448,500
Contribution margin 299,000
Fixed costs 19,500
Net income (loss) 279,500