Question
Dear Sir/Madam, Please see the attachment ======================= Required information (Assessment Problem) Problem 18-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1 [The following
Dear Sir/Madam,
Please see the attachment
=======================
Required information
(Assessment Problem) Problem 18-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1
[The following information applies to the questions displayed below.]
Astro Co. sold 19,100 units of its only product and incurred a $63,282 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018s 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 $141,000. 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 | $ | 699,060 | |||
Variable costs | 489,342 | ||||
Contribution margin | 209,718 | ||||
Fixed costs | 273,000 | ||||
Net loss | $ | (63,282 | ) | ||
Problem 18-4A Part 2
2. Compute the predicted break-even point in dollar sales for year 2018 assuming the machine is installed and there is no change in the unit selling price. (Round your answers to 2 decimal places.)
Problem 18-4A Part 2 2. Compute the predicted break-even point in dollar sales for year 2018 assuming the machine is installed and there is no change in the unit selling price. (Round your answers to 2 decimal places.) Answer tse Tomplete but not entirely correct. Contribution margin per Proposed unit Sales 36.60 Per unit Variable costs 25.62 Per unit Contribution margin Per unit 10.98 Contribution Margin Ratio Contribution Margin Choose Numerator: Choose Denominator: Ratio Contribution margin per unit Sales per unit Contribution margin ratio 10.98 36.60 30.00% Break-even point in dollar sales with new machine: Break-Even Point in Choose Numerator: Choose Denominator: Dollars Contribution margin Total fixed costs Break-even in dollars ratio $ 910,000 30.00% 273,000 =Step by Step Solution
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