Question
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
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) 4. Compute the sales level required in both dollars and units to earn $100,000 of target pretax income in 2020 with the machine installed and no change in unit sales price. (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 Choose Numerator: Choose Denominator: = Sales Dollars Required = Sales dollars required Sales level required in units Choose Numerator: Choose Denominator: 1 Sales Units Required = Sales units required
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