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Required information (The following information applies to the questions displayed below.) Astro Co. sold 19,600 units of its only product and incurred a $46,568 loss
Required information (The following information applies to the questions displayed below.) Astro Co. sold 19,600 units of its only product and incurred a $46,568 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 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $146,000. 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 Sales $ 727,160 Variable costs 581,728 Contribution margin 145,432 Fixed costs 192,000 Net loss $ (46,568) 4. Compute the sales level required in both dollars and units to earn $160,000 of target pretax income in 2020 with the machine installed and no change in unit sales price. (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 Choose Numerator: 1 Choose Denominator: Sales Dollars Required = Sales dollars required Sales level required in units Choose Numerator: Choose Denominator: = Sales Units Required = Sales units required
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