Required information Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below.) Astro Company sold 23,500 units of its only product and reported income of $186,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 43% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $157,000. Total units sold and the selling price per unit will not change. ASTRO COMPARTY Contribution Mergin Income Statement For Year Ended December 31 Seles (857 per unit) Variable corte (337 per unit) Contribution margin Fixed corte $ 1,339,500 969.588 478,000 294,308 Problem 21-3A (Algo) Part 1 1. Compute the break-even point in dollar sales for next year assuming the machine is installed Note: Round your answers to 2 decimal places. Contribution margin Contribution Margin Ratio Numerator Par unt Denominator Contribution Margin Rate Selling price per unt Contribution margin ratio Problem 21-3A (Algo) Part 1 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Note: Round your answers to 2 decimal places. Contribution margin Contribution Margin Ratio Numerator: Contribution margin per unit $ 57.00/ Answer is not complete. Per unit Denominator: Selling price per unit $ 57.00 = Break-even point in dollar sales with new machine: Numerator: Total fixed costs $ Denominator: / Contribution margin ratio = 235,200/ 56.00% = $ Contribution Margin Ratio Contribution margin ratio 100.00% Break-Even Point in Dollars Break-even point in dollars 420,000 Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below.] Astro Company sold 23,500 units of its only product and reported income of $186,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 43% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $157,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($57 per unit) Variable costs ($37 per unit) Contribution margin Fixed costs Income $ 1,339,500 869,500 470,000 284,000 $ 186,000 Problem 21-3A (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 $1,339,500. Note: 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 Contribution margin Fixed costs Income 470,000 284,000 $186,000 Problem 21-3A (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 $1,339,500. Note: 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