Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

help please :) Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below]

help please :)
image text in transcribed
image text in transcribed
image text in transcribed
Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below] Astro Company sold 25,000 units of its only product and reported income of $117,600 for the current year: During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $149,000. Total units sold and the selling price per unit will not change. Problem 21-3A (Algo) Part1 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Note: Round your answers to 2 decimal places. Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below.] Astro Company sold 25,000 units of its only product and reported income of $117,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by instaling a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $149,000. Total units sold and the selling price per unit will not change. Problem 21-3A (Algo) Part 2 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed Assume sales are $1,000,000. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar. Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below] Astro Company sold 25,000 units of its only product and reported income of $117,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $149,000. Total units sold and the selling price per unit will not change. Problem 21-3A (Algo) Part 3 3. Compute the sales level requlred in both dollars and units to earn $190.000 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions