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Required information [The following information applies to the questions displayed below.) Astro Company sold 25,000 units of its only product and reported income of
Required information [The following information applies to the questions displayed below.) Astro Company sold 25,000 units of its only product and reported income of $117,600 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 $149,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 311 Sales ($40 per unit) Variable costs ($32 per unit) Contribution margin Fixed costs Incone $ 1,000,000 800,000 200,000 82,400 $117,600 3. Compute the sales level required in both dollars and units to earn $190,000 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
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