Astro Company sold $24,000$ units of its only product and reported income of $$174,800$ for the current year. During a planning session for next year$$s activities, the production manager notes that variable costs can be reduced $42\%$ by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $$158,000.$ Total units sold and the selling price per unit will not change.

ASTRO COMPANY

Contribution Margin Income Statement

For Year Ended December $31$

Sales $($$$58$ per unit$)$ $ $1,392,000$

Variable costs $($$$39$ per unit$)936,000$

Contribution margin $456,000$

Fixed costs $281,200$

Income $ $174,800$

$2.$ Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $$1,392,000.$