Chapter $21$ Problems

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Astro Company sold $26,500$ units of its only product and reported income of $$246,000$ for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced $60\%$ by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $$150,000.$ Total units sold and the selling price per unit will not change.

$\backslash$table$[[\backslash$table$[[$ASTRO COMPANY$],[$Contribution Margin Income Statement$],[$For Year Ended December $31]]],[\backslash$table$[[$Sales $($ $$50$ per unit$)],[$Variable costs $($ $$35$ per unit$)]],\backslash$table$[[$$$1,325,000],[927,500]]],[\backslash$table$[[$Contribution margin$],[$Fixed costs$]],\backslash$table$[[397,500],[151,500]]],[$Income$,$$$246,000]]$

References

Problem $21-3$A $($Algo$)$ Part $3$

$3.$ Compute the sales level required in both dollars and units to earn $$160,000$ of target income for next year with the machine installed.

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places. Round "Contribution margin ratio" to nearest whole percentage