Check Astro Co. sold 19,400 units of its only product and incurred a $44,828 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018's 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 $144,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2017 Sales $715,860 Variable costs 572, 688 Contribution margin 143, 172 188,000 Fixed costs $ (44,828) Net loss Required: 1. Compute the break-even point in dollar sales for year 2017. (Round your answers to 2 decimal places.) Current Contribution Margin Per Unit Contribution Margin Ratio of 5 Next > WhatsApp Ima...jpeg ^ WhatsApp Ima...jpeg B WhatsApp Ima....jpeg ^ beg^ WhatsApp Ima....jpeg ^ Saved Help Save & Exit Check my NEL TUDO YUUU 3. Prepare a forecasted contribution margin income statement for 2018 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2018 Contribution margin WhatsApp Ima....jpeg ^ WhatsApp Ima....jpeg ^ WhatsApp Ima....jpeg ^ WhatsApp Ima....jpeg ^ eg Saved Help Save & Exit S Check my Net loss $(44,828) 4. Compute the sales level required in both dollars and units to earn $140,000 of target pretax income in 2018 with the machine installed and no change in unit sales price. (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 Choose Numerator: II IID Choose Denominator: = Sales dollars required Sales dollars required Sales level required in units Choose Numerator: Choose Denominator: = Sales units required = Sales units required B WhatsApp Ima...jpeg D WhatsApp Ima....jpeg A inea ^ D WhatsApp Ima...jpeg ^ Saved Help Save & Exit Submi Check my work Net loss 5. Prepare a forecasted contribution margin income statement that shows the results at the sales level computed in part 4. Assume no income taxes will be due. (Do not round intermediate calculations. Round "per unit answers" to 2 decimal places.) ASTRO COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2018 $ Per Unit $ 36.90 Contribution margin of 5 Next >
