Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

! Required information [ The following information applies to the questions displayed below. ] Astro Co . sold 1 9 , 7 0 0 units

!
Required information
[The following information applies to the questions displayed below.]
Astro Co. sold 19,700 units of its only product and incurred a $59,290 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 $147,000. The maximum output capacity of the company is 40,000 units per year.
2. Compute the predicted break-even point in dollar sales for 2020 assuming the machine is installed and there is no change in the unit selling price. (Round your answers to 2 decimal places.)
\table[[,Contribution Margin per unit,Proposed,0],[,,.,],[,,,,,],[,,,$,,],[Contribution Margin Ratio],[,Choose Numerator:,1,Choose Denominator:,=,C tribution Margin Ratio],[,,1,-,=,Contribution margin ratio],[,,,9,,0],[Break-even point in dollar sales with new machine:],[,Choose Numerator:,1,Choose Denominator:,=,Break-Even Point in Dollars],[,,1,+,=,Break-even point in dollars],[,?,,,,0]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik

10th edition

0-07-794127-6, 978-0-07-79412, 978-0077431808

Students also viewed these Accounting questions