Astro Co. sold 20,500 units of its only product and incurred a $67,750 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2014'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 $155.000 ASTRO COMPANY The maximum output capacity of the company is 40,000 units per year Contribution Margin Income Statement Compute the sales level required in both dollars and units to earn $150,000 of after-tax income in For Year Ended December 31, 2013 2014 with the machine installed and no change in the unit sales price. Assume that the income ta Sales $779,000 ate 40 Variable costs 584.250 Contribution margin 94,750 Fixed costs 262,500 Calculation of targeted pretax income Net loss (67,750 Pretax income 40% Income taxes After-tax income 150.000 Sales level required in dollars Choose Choose Denominator: Sales dollars required Numerator: Sales dollars required Sales level required in units Choose Choose Denominator: Sales units required Numerator: Sales units required 1. Compute the break-even point in dollar sales for year2013 Per unit costs: Current Sales Variable costs Contribution margin 0.00 Contribution margin ratio Choose Numerator: Choose Denominator: Contribution margin ratio Contribution margin ratio Break-even point in dollar sales: Choose Numerator: Choose Denominator: Break-even point in dollars Break-even point in dollars