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 19,000 units of its only product and incurred a $128.000 loss

image text in transcribed
image text in transcribed
image text in transcribed
Required information The following information applies to the questions displayed below) Astro Co. sold 19,000 units of its only product and incurred a $128.000 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 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $140,000. The maximum output capacity of the company is 40,000 units per year ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $ 760,000 Variable costs 688.000 Contribution margin 152,800 Fixed costs 280,000 Net loss $(125,000) Required: 1. Compute the break-even point in dollar sales for 2019. (Round your answers to 2 decimal places.) Current Year Contribution Margin Per Unit Sales Variable costs Contribution margin Contribution Margin Ratio Choose Numerator: 3 0.00 Choose Denominator: Contribution Margin Ratio Contribution marginato 0 Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $ 760,000 Variable costs 608,000 Contribution margin 152,000 Fixed costs 280,000 Net loss $(128,000) Required: 1. Compute the break-even point in dollar sales for 2019. (Round your answers to 2 decimal places.) Current Year Contribution Margin Per Unit Sales Variable costs Contribution margin Contribution Margin Ratio Choose Numerator: 0.00 1 Choose Denominator: Contribution Margin Ratio Contribution margin ratio 1 Break-Even Point in Dollar Sales: Choose Numerator: 1 Choose Denominator: Break-Even Point in Dollars Break-even point in dollars 0 Check my ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $760,000 Variable costs 608,000 Contribution margin 152,800 Fixed costs 280,000 Net loss $(128,000) 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.) Contribution Margin per unit Proposed s 0.00 Contribution Margin Ratio Choose Numerator: 1 Choose Denominator: Contribution Margin Ratio 1 = Contribution margin ratio Break-even point in dollar sales with new machine: Choose Numeratori Choose Denominator Break-Even Point in Dollars Break even point in dollars 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

The Life Audit Take Control Of Your Life Now Every Minutes Counts

Authors: Caroline Righton

1st Edition

978-0340836781

More Books

Students also viewed these Accounting questions

Question

5. Describe the visual representations, or models, of communication

Answered: 1 week ago