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 28,000 units of its only product and reported income of $161,000 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 $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income $ 1,568,000 1,176,000 392,000 231,000 $ 161,000 Problem 18-3A (Algo) Part 1 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.) Contribution Margin per unit Proposed Contribution Margin Ratio Numerator: Break-even point in dollar sales with new machine: Numerator: 1 Denominator: = Contribution Margin Ratio = Contribution margin ratio Denominator: Break-Even Point in Dollars = Break-even point in dollars