HELP
Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 46% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $154,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($54 per unit) $ 1,188,000 Variable costs ($48 per unit) 1,056,000 Contribution margin 132,000 Fixed costs 61,800 Income $ 70,200 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.) Proposed Contribution Margin per unit Sales Variable costs $ 0.00 Contribution margin Contribution Margin Ratio Numerator: Denominator: = Contribution Margin Ratio = Contribution margin ratio 0 Break-even point in dollar sales with new machine: Numerator: Denominator: Break-Even Point in Dollars Break-even point in dollars 0 Required information (The following information applies to the questions displayed below.) Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 46% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $154,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($54 per unit) $ 1,188,000 Variable costs ($48 per unit) 1,056,000 Contribution margin 132,000 Fixed costs 61,800 Income $ 70,200 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,188,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin 0 $ 0 Required information (The following information applies to the questions displayed below.) Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 46% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $154,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($54 per unit) $ 1,188,000 Variable costs ($48 per unit) 1,056,000 Contribution margin 132,000 Fixed costs 61,800 Income $ 70,200 3. Compute the sales level required in both dollars and units to earn $240,000 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
