Question
Astro Company sold 26,000 units of its only product and reported income of $114,100 for the current year. During a planning session for next years
Astro Company sold 26,000 units of its only product and reported income of $114,100 for the current year. During a planning session for next years 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 $147,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($42 per unit) $ 1,092,000 Variable costs ($35 per unit) 910,000 Contribution margin 182,000 Fixed costs 67,900 Income $ 114,100 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.)
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