Question
Required information [The following information applies to the questions displayed below.] Astro Co. sold 20,300 units of its only product and incurred a $78,798 loss
Required information
[The following information applies to the questions displayed below.]
Astro Co. sold 20,300 units of its only product and incurred a $78,798 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018s 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 $153,000. 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 | $ | 767,340 | |||
Variable costs | 537,138 | ||||
Contribution margin | 230,202 | ||||
Fixed costs | 309,000 | ||||
Net loss | $ | (78,798 | ) | ||
Required:
1. Compute the break-even point in dollar sales for year 2017. (Round your answers to 2 decimal places.)
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