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[The following information applies to the questions displayed below.) Astro Company sold 23,000 units of its only product and reported income of $264,600 for the

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[The following information applies to the questions displayed below.) Astro Company sold 23,000 units of its only product and reported income of $264,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 44% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $156,000. 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) $ 1,288,000 Variable costs ($35 per unit) 805,000 Contribution margin 483,000 Pixed costs 218,400 Income $ 264,600 3. Compute the sales level required in both dollars and units to earn $260,000 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) Answer is complete but not entirely correct. Sales level required in dollars Numerator: Fixed costs plus target income $ 478.400 Sales level required in units Numerator: Fixed costs plus target income 478,400 Denominator: Contribution margin ratio 65.00% Sales dollars required $ 736,000 1 1 Denominator: Contribution margin per unit S 36.40 Sales units required 13,143 units X 1

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