Required information Problem 18-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1 [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 2018'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 $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, 2017 Sales $1,000,000 Variable costs 800,000 Contribution margin 200,000 Fixed costs 250,000 Net loss $ (50,000) 2. Compute the predicted break-even point in dollar sales for year 2018 assuming the machine is installed and there is no change the unit selling price. Contribution margin per unit Proposed Sales Variable costs Contribution margin Contribution Margin Ratio Choose Numerator: 1 Choose Denominator: Contribution Margin Ratio Contribution margin ratio = Break-Even Point in Dollar Sales with New Machine: Choose Numerator: Choose Denominator: Break-Even Point in Dollars Break-even point in dollars