Required information [The following information applies to the questions displayed below.) Astro Company sold 28,000 units of its only product and reported income of $161,000 for the current year. During a planning session for next year'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 $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) $ 1,568,000 Variable costs ($42 per unit) 1,176,000 Contribution margin 392,000 Fixed costs 231,000 Income $ 161,000 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.) Contribution Margin per unit Proposed Contribution Margin Ratio Numerator: 1 Denominator: = Contribution Margin Ratio Contribution margin ratio Break-even point in dollar sales with new machine: Numerator: 1 Denominator: = Break-Even Point in Dollars Break-even point in dollars Required information [The following information applies to the questions displayed below.] Astro Company sold 28,000 units of its only product and reported income of $161,000 for the current year. During a planning session for next year'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 $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) $ 1,568,000 Variable costs ($42 per unit) 1,176,000 Contribution margin 392,000 Fixed costs 231,000 Income $ 161,000 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,568,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin Required information [The following information applies to the questions displayed below.) Astro Company sold 28,000 units of its only product and reported income of $161,000 for the current year. During a planning session for next year'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 $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) $ 1,568,000 Variable costs ($42 per unit) 1,176,000 Contribution margin 392,000 Fixed costs 231,000 Income $ 161,000 3. Compute the sales level required in both dollars and units to earn $130,000 of target income for next year with the machine installed. (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 Numerator: Denominator: = Sales Dollars Required = Sales dollars required Sales level required in units Numerator: Denominator: = Sales Units Required 1 1 = Sales units required
