Astro Co. sold 19,200 units of its only product and incurred a $43,072 loss (ignoring taxes) for the current year, as shownhere. During a planning session for year 2020's activities, the production manager notes that variable costs can bereduced 50% by installing a machine that automates several operations. To obtain these savings, the company mustincrease its annual fixed costs by $142,000. The maximum output capacity of the company is 40,000 units per year.ASTRO COMPANYContribution Margin Income StatementFor Year Ended December 31, 2019$704,640SalesVariable costs563,712Contribution margin140,928Fixed costs184,000Net loss$ (43,072)ompute the predicted break-even point in dollar sales for 2020 assuming the machine is installed and there is no change in theselling price. (Round your answers to 2 decimal places.)Contribution Margin per unitProposed$0.00Contribution Margin RatioChoose Numerator:Choose Denominator:Contribution Margin RatioContribution margin ratioak-even point in dollar sales with new machine:Choose Numerator:Choose Denominator:Break-Even Point in DollarsBreak-even point in dollars

Selling price = Sales amount / units Selling price = $ 704,640 / 19400 Selling price = $ 36.32 per…

Astro Co. sold 19,200 units of its only product and incurred a $43,072 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 $142,000. 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 $704,640 Variable costs 563,712 Contribution margin 140,928 184,000 Fixed costs Net loss $(43,072) ompute the predicted break-even point in dollar sales for 2020 assuming the machine is installed and there is no change in the selling price. (Round your answers to 2 decimal places.)

Astro Co. sold 19,200 units of its only product and incurred a $43,072 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 $142,000. 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 $704,640 Variable costs 563,712 Contribution margin 140,928 184,000 Fixed costs Net loss $(43,072) ompute the predicted break-even point in dollar sales for 2020 assuming the machine is installed and there is no change in the selling price. (Round your answers to 2 decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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[The following information applies to the questions displayed below.] Astro Co. sold 19,200 units of its only product and incurred a $43,072 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 $142,000. 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 $704,640 563,712 Sales Variable costs Contribution margin Fixed costs 140,928 184,000 Net loss $ (43,072) Required: . Compute the break-even point in dollar sales for 2019. (Round your answers to 2 decimal places.) Contribution Margin Per Unit Current Year $ 0.00 Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio…
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