Required information Problem 5-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below.] Astro Company sold 21,500 units of its only product and reported income of $68,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 47% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $153,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($53 per unit) Variable costs ($46 per unit) Contribution margin Fixed costs Income $ 1,139,500 989,000 150,500 81,900 $ 68,600 Problem 5-3A (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.) Answer is not complete. Contribution Margin per Proposed unit Sales 1,139,500.00 Per unit Variable costs 524,170.00 Per unit 615,330.00 Per unit < Prev 6 7 8 00 of 8 Next > variatie cu 340 per uhat) Contribution margin Fixed costs Income 303,000 150,500 81,900 $ 68,600 Problem 5-3A (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 decim.al places.) Answer is not complete. Contribution Margin per Proposed unit Sales 1,139,500.00 Per unit Variable costs 524,170.00 Per unit 615,330.00 Per unit Contribution Margin Ratio Numerator: Denominator: Break-even point in dollar sales with new machine: Numerator: Denominator: Contribution Margin Ratio Contribution margin ratio Break-Even Point in Dollars Break-even point in dollars 0 Required information. Problem 5-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below] Astro Company sold 21,500 units of its only product and reported income of $68,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 47% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $153,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($53 per unit) Variable costs ($46 per unit) Contribution margin Fixed costs Income $ 1,139,500 989,000 150,500 81,900 $ 68,600 Problem 5-3A (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 $1,139,500. (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 01 < Prev 7 7 8 of 8 Next > Problem 5-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below.] Astro Company sold 21,500 units of its only product and reported income of $68,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 47% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $153,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($53 per unit) Variable costs ($46 per unit) Contribution margin- Fixed costs Income $ 1,139,500 989,800 150,500 81,900 $ 68,600 Problem 5-3A (Algo) Part 3 3. Compute the sales level required in both dollars and units to earn $230,000 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: Denominator: Sales dollars required Sales level required in units Numerator: Denominator: = Sales units required