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 26,500 units of its only product and reported income of $246,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 60% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $150,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($50 per unit) Variable costs ($35 per unit) Contribution margin Fixed costs Income $ 1,325,000 927,500 397,500 151,500 $ 246,000 Problem 21-3A (Algo) Part 3 3. Compute the sales level required in both dollars and units to earn $160,000 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 Numerator: Fixed costs plus target income Sales level required in units Numerator: Fixed costs plus target income Denominator: Contribution margin ratio = Sales dollars required 60.00% = $ 0 Denominator: Contribution margin per unit $ =Sales units required 17.50 = 1 units