[The following information applies to the questions displayed below.]

Astro Co. sold 21,000 units of its only product and incurred a $37,000 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2014s 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 $230,000. The maximum output capacity of the company is 40,000 units per year.

ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2013
Sales		$	1,155,000
Variable costs			924,000
Contribution margin			231,000
Fixed costs			268,000
Net loss		$	(37,000	)

value: 714 points 2. Compute the predicted break-even point in dollar sales for year 2014 assuming the machine is installed and there is no change in the unit sales price Answer is complete but not entirely correct. Proposed Per unit costs Sales Variable costs Contribution margin 55.00 26.40 28.60 Contribution margin ratio Choose Numerator: Choose Denominator: Contribution margin Contribution margin per unit 1/ 1 Sales per unit Contribution margin ratio 55.00 | 52.00% 28.60 ak-even point in dollar sales with new machine Break-even point in - Break-even point in dollars 957.692 Choose Numerator: Choose Denominator Contribution margin ratio Total fixed costs 498,000 52.00%