Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2

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[The following information applies to the questions displayed below.] Astro Company sold 24,000 units of its only product and reported income of $174,800 for the current year. During a planning session for next years activities, the production manager notes that variable costs can be reduced 42% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $158,000. Total units sold and the selling price per unit will not change.

ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($58 per unit)	$ 1,392,000
Variable costs ($39 per unit)	936,000
Contribution margin	456,000
Fixed costs	281,200
Income	$ 174,800

1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.)

Contribution margin			Per unit
Contribution Margin Ratio
Numerator:	/	Denominator:	=	Contribution Margin Ratio
Contribution margin per unit	/	Selling price per unit	=	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