Question
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]
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
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