Astro Co. sold 20,900 units of its only product and incurred a $71,860 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 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $159,000. The maximum output capacity of the company is 40,000 units per year.

Required information (Assessment Problem) Problem 18-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1 [The following information applies to the questions displayed below.] Astro Co. sold 20,900 units of its only product and incurred a $71,860 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 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $159,000. 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 $ 802,560 Variable costs 601,920 Contribution margin 200,640 Fixed costs 272,500 Net loss $ (71,860) Required: 1. Compute the break-even point in dollar sales for year 2017. (Round your answers to 2 decimal places.) X Answer is not complete. Current Contribution Margin Per Unit Sales $ 38.40 Per unit Variable costs 17.28 X Per unit $ 21.12 Per unit Contribution Margin Ratio Choose Numerator: Choose Denominator: Sales per unit Contribution Margin Ratio Contribution margin ratio Contribution margin per unit $ 21.12 X $ 38.40 - 55.00% Break-Even Point in Dollar Sales: Choose Numerator: Choose Break-Even Point in Dol Break-even point in dollars Total fixed costs Contribution margin ratio > > $ 431,500 X/ 55.00% X = 784,545