4 Part 1 of 3 10 points eBook Print References Required information Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below.] Astro Company sold 27,500 units of its only product and reported income of $67,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $144,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($50 per unit) Variable costs ($45 per unit) Contribution margin Fixed costs Income Problem 21-3A (Algo) Part 1 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Note: Round your answers to 2 decimal places. |Contribution margin Contribution Margin Ratio Numerator: 1 $ 1,375,000 1,237,500 137,500 70,500 $ 67,000 1 Denominator: Break-even point in dollar sales with new machine: Numerator: Denominator: Per unit C = Contribution Margin Ratio Contribution margin ratio MOO 0 E Break-Even Point in Dollars Break-even point in dollars 0

Required information Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 (The following information apples to the questions displayed below] Astro Comparny sold 27,500 units of its only product and reported income of $67,000 for the current year, During a planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by instaling a machine that automates several operations. To obtain these savings, the company must increase its annual fined costs by $144,000. Total units sold and the seling price per unit will not change. Problem 21-3A (Algo) Part 1 1. Compute the break-ven point in dollar sales for next year assuming the machine is installed. Note: Round your answers to 2 decimal places