Question
Astro Co. sold 19,200 units of its only product and incurred a $43,072 loss (ignoring taxes) for the current year as shown here. During a
Astro Co. sold 19,200 units of its only product and incurred a $43,072 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018s 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 $142,000. The maximum output capacity of the company is 40,000 units per year. Compute the sales level required in both dollars and units to earn $120,000 of target pretax income in 2018 with the machine installed and no change in unit sales price. (Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to nearest whole percentage)
4. Compute the sales level required in both dollars and units to earn $120,000 of target pretax income in 2018 with the machine installed and no change in unit sales price. (Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to nearest whole percentage) Sales level required in dollars Choose Numerator: 1 Choose Denominator: = Sales dollars required = Sales dollars required 0 Sales level required in units Choose Numerator: 1 Choose Denominator: = Sales units required Sales units required 4. Compute the sales level required in both dollars and units to earn $120,000 of target pretax income in 2018 with the machine installed and no change in unit sales price. (Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to nearest whole percentage) Sales level required in dollars Choose Numerator: 1 Choose Denominator: = Sales dollars required = Sales dollars required 0 Sales level required in units Choose Numerator: 1 Choose Denominator: = Sales units required Sales units requiredStep by Step Solution
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