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Please help, this is 2 questions! Thank you Problem 21-3A Break-even analysis; income targeting and strategy Astro Co. sold 20,000 units of its only product
Please help, this is 2 questions! Thank you
Problem 21-3A Break-even analysis; income targeting and strategy Astro Co. sold 20,000 units of its only product and reported income of $25,000 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 $241,000. The selling price per unit will not change. Required 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. 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. Check (2) Income, $104,000 3. Compute the sales level required in both dollars and units to earn $208,000 of target income for next year with the machine installed. Problem 21-6A Break-even analysis P2 Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding that has not been as profitable as planned. Because Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year's plans call for a $200 selling price per unit. Its fixed costs for the year are expected to be $270,000. Variable costs for the year are expected to be $140 per unit. Required 1. Estimate Product XT's break-even point in terms of (a) sales units and (b) sales dollarsStep by Step Solution
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