QUESTION 1:

Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 xed costs by $200,000. The maximum output capacity of the company is 40,000 units per year. ASTRD COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $1,000,000 Variable costs 800,000 Contribution margin 200,000 Fixed costs 250,000 Net 1055 $ (50.000) Required: 1. Compute the break-even point in dollar sales for 2019. _-- W_ I--__ --_ Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 xed costs by $200,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $1,000,000 Variable costs 800,000 Contribution margin 200,000 Fixed costs 250,000 Net 1055 $ (50.000) 2. Compute the predicted break-even point in dollar sales for 2020 assuming the machine is installed and there is no change in the unit selling price. - o Required information [T he following information applies to the questions displayed below] Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 xed costs by $200,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $1,000,000 Variable costs 800,000 Contribution margin 200,000 Fixed costs 250,000 Net 1055 $ (50.000) 3. Prepare a forecasted contribution margin income statement for 2020 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due. Contribution margin Required information [The following information applies to the questions displayed below] Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 xed costs by $200,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $1,000,000 Variable costs 800,000 Contribution margin 200.000 Fixed costs 250.000 Net 1.055 $ (50,000) 4. Compute the sales level required in both dollars and units to earn $200,000 of target pretax income in 2020 with the machine installed and no change in unit sales price. -- Sales units required Required information [The following information applies to the questions displayed below] Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 xed costs by $200,000. The maximum output capacity ofthe company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $1,000,000 Variable costs 800,000 Contribution margin 200,000 Fixed costs 250,000 Net 1055 $ (50,000) 5. Prepare a forecasted contribution margin income statement that shows the results at the sales level computed in part 4. Assume no income taxes will be due. (Round your intermediate calculation and final answers to the nearest whole dollar.) Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company's annual xed costs are $562,500. (1) Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and xed costs at the break even point. (2) Assume the company's xed costs increase by $135,000. What amount of sales (in dollars) is needed to break even? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and xed costs at the break-even point. Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $135 per unit. The company's annual xed costs are $562,500. (1) Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and xed costs at the break- even point. (2) Assume the company's xed costs increase by $135,000. What amount of sales (in dollars) is needed to break even? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume the company's fixed costs increase by $135,000. What amount of sales (in dollars) is needed to break even? - --