[The following information applies to the questions displayed below] Astro Company sold 20,000 units of its only product and reported income of $25,000 for the current year. During a planning session for next year's 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 $241,000. 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 ($40 per unit) Contribution margin Fixed costs Income $1,000,000 800,000 200,000 175,000 $ 25,000 3. Compute the sales level required in both dollars and units to earn $208,000 of target income for next year with the machine installed.

[The following information applies to the questions displayed below] Astro Company sold 20,000 units of its only product and reported income of $25,000 for the current year. During a planning session for next year's 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 $241,000. The selling price per unit will not change. 3. Compute the sales levelrequired in both dollars and units to earn $208,000 of target income for next year with the machine installed Sales level required in dollars \begin{tabular}{|c|c|c|c|c|} \hline Numerator: & Denominator: & = \\ \hline & & & \\ \hline & 1 & & & Sales dollars required \\ \hline \end{tabular} Sales level required in units \begin{tabular}{|c|c|c||c||c|} \hline Numerator: & 1 & Denominator: & - & Sales units required \\ \hline \end{tabular}