Question
[The following information applies to the questions displayed below.] Astro Company sold 26,500 units of its only product and reported income of $246,000 for
[The following information applies to the questions displayed below.] Astro Company sold 26,500 units of its only product and reported income of $246,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 60% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $150,000. 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) Variable costs ($35 per unit) Contribution margin Fixed costs Income $ 1,325,000 927,500 397,500 151,500 $ 246,000 Problem 21-3A (Algo) Part 2 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,325,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Answer is complete but not entirely correct. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales Variable costs Contribution margin Fixed costs Income $ 1,325,000 556,500 768,500 301,500 467,000
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