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! Required information [The following information applies to the questions displayed below.] Astro Company sold 24,000 units of its only product and reported income
! Required information [The following information applies to the questions displayed below.] Astro Company sold 24,000 units of its only product and reported income of $174,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 42% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $158,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($58 per unit) Variable costs ($39 per unit) Contribution margin Fixed costs Income $ 1,392,000 936,000 456,000 281,200 $ 174,800 3. Compute the sales level required in both dollars and units to earn $280,000 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: Sales level required in units Numerator: Denominator: 1 = Sales dollars required 0 Denominator: 1 = Sales units required 0
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