Astro Co. sold 20,800 units of its only product and incurred a $56,672 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 $158,000. 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 $ 796,640 Variable costs 637,312 Contribution margin 159,328 Fixed costs 216,000 Net loss 5 (56,672) Problem 18-4A Part 1 Next o 9 00 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 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 opt goo 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.) Contribution margin per unit P roposed Contribution Margin Ratio Choose Numerator: Choose Denominator: - Contribution Margin Ratio Contribution margin ratio Break even point in dollar sales with new machine: Choose Numerator: Choose Denominator: Break Even Point in Dollars Break-even point in dollars Next > o 9300 arch 4. Compute the sales level required in both dollars and units to earn $280,000 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: Choose Denominator: Sales dollars required Sales dollars required - - Sales level required in units Choose Numerator: Choose Denominator: Sales units required Sales units required 6 7 of 7 Next > !