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Required information [The following information applies to the questions displayed below.) Astro Co. sold 19,100 units of its only product and incurred a $63,282 loss
Required information [The following information applies to the questions displayed below.) Astro Co. sold 19,100 units of its only product and incurred a $63,282 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018'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 $141,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2017 Sales $699, 060 Variable costs 489, 342 Contribution margin 209,718 Fixed costs 273,000 Net loss $(63,282) 2. Compute the predicted break-even point in dollar sales for year 2018 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 P roposed Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio Break-even point in dollar sales with new machine: Choose Numerator: I Choose Denominator: = Break-Even Point in Dollars Break-even point in dollars
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