#9. Need help fixing

Astro Company sold 20,000 units of its only product and reported income of $25,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $241,000. The selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($50 per unit) $ 1,000,000 Variable costs ($40 per unit) 800,000 Contribution margin 200,000 Fixed costs 175,000 Income $ 25,000 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. & Answer is complete but not entirely correct. Contribution Margin Per Unit Proposed Sales $ 50 Per unit Variable costs 24 Per unit Contribution margin $ 26 Per unit Contribution Margin Ratio Denominator: Numerator: II II Contribution margin per unit Selling price per unit Contribution Margin Ratio Contribution margin ratio 52% = IS 26 S 50 Contribution margin U UNTU Contribution Margin Ratio Numerator: Denominator: Contribution margin per unit / Selling price per unit = Contribution Margin Ratio Contribution margin ratio 52% $ 26 17 50 Break-Even Point in Dollar Sales with New Machine: Numerator: Break-Even Point in Dollars Denominator: Contribution margin ratio Total fixed costs I Break-even point in dollars 463,462 $ $ 52% 241,000 X 7