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Problem 21-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1 The following information applies to the questions displayed below.] Astro Co. sold 19,100
Problem 21-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1 The following information applies to the questions displayed below.] Astro Co. sold 19,100 units of its only product and incurred a $63,282 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2016'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 $141,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2015 Sales Variable costs $699,060 489,342 Contribution margin Fixed costs 209,718 273,000 Net loss s (63,282)
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