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Required information [The following information applies to the questions displayed below.) Astro Co. sold 20,900 units of its only product and incurred a $71,860 loss
Required information [The following information applies to the questions displayed below.) Astro Co. sold 20,900 units of its only product and incurred a $71,860 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 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $159,000. 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 $ 802,560 Variable costs 601,920 Contribution margin 200, 640 Fixed costs 272,500 $ (71,860) Sales Net loss 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 0.00 Contribution Margin Ratio Choose Numerator: 1 Choose Denominator: Contribution Margin Ratio / Contribution margin ratio Break-even point in dollar sales with new machine: Choose Numerator: Choose Denominator: / 11 Break-Even Point in Dollars Break-even point in dollars 0
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