Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Astro Co. sold 20,700 units of its only product and incurred a $83,778 loss (ignoring taxes) for the current year as shown here. During a

image text in transcribed

Astro Co. sold 20,700 units of its only product and incurred a $83,778 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018'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 $157,000. 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 $ 790,740 Variable costs 553,518 Contribution margin 237, 222 Fixed costs 321,000 Net loss $ (83,778) Required: 1. Compute the break-even point in dollar sales for year 2017. (Round your answers to 2 decimal places.) Contribution Margin Per Unit Current Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio / = Break-Even Point in Dollar Sales: Choose Numerator: 1 Choose Denominator: Break-Even Point in Dollars - Break-even point in dollars

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Auditing

Authors: William C Boynton, Raymond N Johnson

8th Edition

0471230111, 978-0471230113

More Books

Students also viewed these Accounting questions

Question

What is conservative approach ?

Answered: 1 week ago

Question

What are the basic financial decisions ?

Answered: 1 week ago

Question

Did you include SEC required financial data?

Answered: 1 week ago