Required information Problem 18-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below] Astro Company sold 26,000 units of its only product and reported income of $114,100 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 $147,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($42 per unit) Variable costs ($35 per unit) Contribution margin Fixed costs Income $1,092,000 910,000 182,000 67,900 $ 114,100 Problem 18-3A (Algo) Part 2 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,092,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin 0 Problem 18-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below] Astro Company sold 26,000 units of its only product and reported income of $114,100 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 $147,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($42 per unit) Variable costs ($35 per unit) Contribution margin: Fixed costs Income $ 1,092,000 910,000 182,000 67,900 $114,100 Problem 18-3A (Algo) Part 3 3. Compute the sales level required in both dollars and units to earn $170,000 of target income for next year with the machine installed. (Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to nearest whole percentage) Sales level required in dollars Sales Numerator: Sales level required in units Numerator: Denominator: Sales dollars required Denominator: Sales units required