6 Part 3 of 3 10 points Skipped eBook Print References 0 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 Sales level required in dollars Numerator: Fixed costs plus target income Problem 21-3A (Algo) Part 3 3. Compute the sales level required in both dollars and units to earn $140,000 of target income for next year with the machine installed. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio to nearest whole percentage Sales level required in units Numerator: Fixed costs plus target income $ 1,375,000 1,237,500 1 137,500 70,500 $ 67,000 Denominator: Contribution margin ratio Denominator: Contribution margin per unit Y BE m Sales dollars required M Sales units required 0

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 find costs by $144,000. Total units sold and the selling price per unit will not change. Problem 21-3A (Algo) Part 3 3. Compute the sales level required in both dollars and units to earn $140,000 of target income for next year with the machine installed. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to nearest whole percentage