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Required information Problem 05-4A Break-even analysis, income targeting and forecasting LO C2, P2, A1 [The following information applies to the questions displayed below] Astro Co
Required information Problem 05-4A Break-even analysis, income targeting and forecasting LO C2, P2, A1 [The following information applies to the questions displayed below] Astro Co sold 19,000 units of its only product and incurred a $128,000 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 fixed costs by $140.000 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 $ 760,000 Variable costs 608,000 Contribution margin 152,000 Fixed costs 280,000 Net loss $(128,000) Problem 05-4A Part 1 Required: 1. Compute the break-even point in dollar sales for 2019. (Round your answers to 2 decimal places.) Current Year Contribution Margin Per Unit Contribution margin $ 0.00 Contribution Margin Ratio Choose Numerator: Contribution margin per unit 1 Choose Denominator: | Selling price per unit Contribution Margin Ratio Contribution margin ratio Break-Even Point in Dollar Sales: Choose Numerator: 1 Choose Denominator: Break Even Point in Dollars Break-even point in dollars 0
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