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Problem 21-3A Break-even analysis; income targeting and strategy C 2 Astro Co. sold 20,000 units of its only product and reported income of $25,000 for
Problem 21-3A Break-even analysis; income targeting and strategy C 2 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 breakeven point in dollar sales for next jear asruming the machine is installed. 2. Prepare a contribution margin income statement for next yeat that shous the expected results with the machine installed. Assume sales are $1,000,000
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