Problem 21-3A Break-even analysis; income targeting and strategy C2 A1 P2 Astro Co. sold 20,000 units...

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Problem 21-3A Break-even analysis; income targeting and strategy C2 A1 P2 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. Contribution Margin come Statement For Year Ended December 31 Required Sales ($50 per unit) $1,000,000 Variable costs ($40 per unit) 800,000 Contribution margin 200,000 175,000 Fixed costs Income $ 25,000 Problem 21-3A Break-even analysis; income targeting and strategy C2 A1 P2 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. Contribution Margin come Statement For Year Ended December 31 Required Sales ($50 per unit) $1,000,000 Variable costs ($40 per unit) 800,000 Contribution margin 200,000 175,000 Fixed costs Income $ 25,000