Required information Problem 5-3A (Static) Break-even analysis; income targeting and strategy LO C2, A1, P2 The following information applies to the questions displayed below! Astro Company sold 20,000 units of its only product and reported income of $25,000 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 $241,000. The selling price per unit will not change ASTRO COMPANY Contribution Margin Encome Statement For Year Ended December 31 Sales (550 per unit) $ 1,000,000 Variable costs (540) per unit) 800.000 Contribution margin 200.000 Fixed costs 125.000 Income $25.000 Problem 5-3A (Static) Part 1 1. Compute the break-even point in dollar sales for next year assuming the machine is installed Proposed Contribution Margin Per Unit Sales Variable costs Contribution margin Problem 5-3A (Static) Part 1 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Proposed Contribution Margin Per Unit Sales Variable costs 0 Contribution margin Contribution Margin Ratio Numerator: Denominator: Contribution Margin Ratio Contribution margin ratio 0 Break Even Point in Dollar Sales with New Machine: Numerator: Denominator: Break Even Point in Dollars Break-even point in dollars 0 [The following information applies to the questions displayed below) Alden Company's monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs Month Units Sold 1 320,000 2 160,000 3 280,000 4 200,000 5 300,000 200,000 Total Cost $ 160,000 100,000 220,000 100,000 230,000 120,000 Honth 7 8 9 le 11 12 Units Sold 340,000 280,000 80,000 160,000 100,000 110,000 Total Cost $ 220,000 160,000 64,000 140,000 100,000 30,000 Problem 5-1A (Static) Part 2 2. Predict future total costs when sales volume is (a) 220.000 units and (b) 240,000 units. Predictions (a) (b) 220,000 240,000 Units Total S 0 0S