need assitance with parts 4 and 5. 1-3 are correct already
Required Information 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 20,400 units of its only product and incurred a $53,368 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 $154,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Tncome statement For Year Ended December 31, 2019 Sales $773, 160 Variable costs 618,528 Contribution margin 154,632 Yixed costs 200.000 Net loss $(53,368) Problem 18-4A Part 1 Required: 1. Compute the break-even point in dollar sales for 2019. (Round your answers to 2 decimal places.) Answer is complete and correct. Current Year Contribution Margin Per Unit Sales IS 37.90 Per unit Variable costs 30.32 Per unit 758 Per unit Contribution margin Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio 20.00% Contribution margin per unit 7.58 Selling price per unit S 37.90 Break-Even Point in Dollar Sales: Choose Numerator: Choose Denominator: Break-Even Point in Dollars Break-even point in dollars Total fixed costs Contribution margin ratio 208,000 20.00% S 1.040,000 Problem 18-4A Part 2 2. Compute the predicted break-even point in dollar sales for 2020 assuming the machine is installed and there is no change in the unit selling price. (Round your answers to 2 decimal places) Proposed Contribution Margin per unit Sales Variable costs Food costs Contribution Margin Ratio 37.90 Por unit 30.32 Per unit 7.58 Per unit $ Choose Numerator 1 Choose Denominator: Contribution Margin Ratio Contribution margin ratio 20.00% - Contribution margin per unit Selling price per unit 758 $ 37.90 Break-even point in dollar sales with new machine Choose Numerator: Choose Denominator: Faxed costs per unit Contribution margin ratio 208.000 20.00% Birwak-Even Point in Dollars Break-even point in dollar $1,040,000 Problem 18-4A Part 3 3. Prepare a forecasted contribution margin income statement for 2020 that shows the expected results with the machine installed. Assume that the unit seling 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) Answer is complete and correct. ASTRO COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Sales 773.100 Variable costs (309.264) Contribution margin 463.890 Forced costs (362.000) Net Income 101.890 Problem 18-4A Part 4 4. Compute the sales level required in both dollars and units to earn $240,000 of target pretax income in 2020 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 Numeratori Choose Denominator: Sales Dollars Required Sales dollars required Faced costs plus protax income Contribution margin ratio 602,000/ Sales level required in units Choose Numeratori Choose Denominator: Fixed costs plus pretax income Contribution margin per unit 602,000 Sales Units Required = Sales units required Problem 18-4A Part 5 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, 2020 $ Per Unit $ 37.90 0 Sales Variable costs Contribution margin Fixed costs Income taxes
