Astro Co. sold 19,400 units of its only product and incurred a $44,828 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 $144,000. The maximum output capacity of the company is 40,000 units per year.

ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2017

Sales $715,860

Variable costs 572,688

Contribution margin 143,172

Fixed costs 188,000

Net loss $(44,828)

1. Compute the break-even point in dollar sales for year 2017. (Round your answers to 2 decimal places.)

2. Compute the predicted break-even point in dollar sales for year 2018 assuming the machine is installed and there is no change in the unit selling price. (Round your answers to 2 decimal places.)

3. Prepare a forecasted contribution margin income statement for 2018 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

	Contribution Margin Per Unit		Current
			$0.00
Contribution Margin Ratio
	Choose Numerator:	/	Choose Denominator:	=	Contribution Margin Ratio
		/		=	Contribution margin ratio
					0
Break-Even Point in Dollar Sales:
	Choose Numerator:	/	Choose Denominator:	=	Break-Even Point in Dollars
		/		=	Break-even point in dollars
					0

	Contribution margin per unit		Proposed
			$0.00
Contribution Margin Ratio
	Choose Numerator:	/	Choose Denominator:	=	Contribution Margin Ratio
		/		=	Contribution margin ratio
					0
Break-even point in dollar sales with new machine:
	Choose Numerator:	/	Choose Denominator:	=	Break-Even Point in Dollars
		/		=	Break-even point in dollars
					0

ASTRO COMPANY
Forecasted Contribution Margin Income Statement
For Year Ended December 31, 2018
Contribution margin	0
	$0