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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
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 Sales For Year Ended December 31, 2019 Variable costs Contribution margin Fixed costs Net loss $ 760,000 608,000 152,000 280,000 $ (128,000) Required: 1. Compute the break-even point in dollar sales for 2019. (Round your answers to 2 decimal places.) Contribution Margin Per Unit Current Year Contribution Margin Ratio Choose Numerator: 1 Choose Denominator: = Contribution Margin Ratio 1 = Contribution margin ratio Break-Even Point in Dollar Sales: Choose Numerator: 1 Choose Denominator: Break-Even Point in Dollars = Break-even point in dollars
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