Astro Company sold 28,500 units of its only product and reported income of $57,900 for the current year. During a planning session for next years 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 $142,000. Total units sold and the selling price per unit will not change.

ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($50 per unit)	$ 1,425,000
Variable costs ($47 per unit)	1,339,500
Contribution margin	85,500
Fixed costs	27,600
Income	$ 57,900

2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,425,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales
Variable costs
Contribution margin	0
Fixed costs
Income	$0

3. Compute the sales level required in both dollars and units to earn $120,000 of target income for next year with the machine installed. (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
	Numerator:	/	Denominator:	=
		/		=	Sales dollars required
					0
Sales level required in units
	Numerator:	/	Denominator:	=
		/		=	Sales units required
					0