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Required Information [The following information applies to the questions displayed below.] Astro Company sold 29,000 units of its only product and reported Income of $37,800
Required Information [The following information applies to the questions displayed below.] Astro Company sold 29,000 units of its only product and reported Income of $37,800 for the current year. During a planning session for next year'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. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income statement For Year Ended December 31 Sales ($50 per unit) $ 1,450,000 variable costs ($48 per unit) 1,392,800 Contribution margin 58,888 20,200 Income $ 37,800 Fixed costs 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Contribution Margin per unit Sales Proposed $ 50.00 Per unit Per unit Per unit Variable costs 2.00 Contribution margin $ 48.00 Contribution Margin Ratio Numerator: Denominator: Contribution margin per unit Selling price per unit IS 2.00 $ 50.00 Break-even point in dollar sales with new machine: Numerator: Denominator: Total fixed costs 1 Contribution margin ratio S 20.200 1 4.00% Contribution Margin Ratio Contribution margin ratio 4.00% Break-Even Point in Dollars Break-even point in dollars S 505,000 >
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