Question
Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a planning session for next years
Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a planning session for next years activities, the production manager notes that variable costs can be reduced 46% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $154,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY | |
---|---|
Contribution Margin Income Statement | |
For Year Ended December 31 | |
Sales ($54 per unit) | $ 1,188,000 |
Variable costs ($48 per unit) | 1,056,000 |
Contribution margin | 132,000 |
Fixed costs | 61,800 |
Income | $ 70,200 |
1. Compute the break-even point in dollar sales for next year assuming the machine is installed (table shown below).
Note: Round your answers to 2 decimal places.
1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Note: Round your answers to 2 decimal places
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