Astro Company sola 20,500 units of its only product and reported income of $71,400 for the current year. During aplanning session for next year's activities, the production manager notes that variable costs can be reduced 49% byinstalling a machine that automates several operations. To obtain these savings, the company must increase its annualfixed costs by $151,000. Total units sold and the selling price per unit will not change.ASTRO COMPANYContribution Margin Income StatementFor Year Ended December 31Sales ($51 per unit)Variable costs ($42 per unit)Contribution marginFixed costsIncome$ 1,045,500861,000184,500107,100$ 77,4001. Compute the break-even point in dollar sales for next year assuming the machine is installed.Note: Round your answers to 2 decimal places.Contribution marginContribution Margin RatioPer unitNumerator:Denominator:Break-even point in dollar sales with new machine:Numerator:Contribution Margin RatioContribution margin ratioDenominator:Break-Even Point in Dollars

Formulas:-Contribution margin ratio = contribution / sales *100Break even point = Fixed cost /…

Answered: Astro Company sola 20,500 units of its…

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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Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 134,000 100 % Variable expenses 53,600 40 % Contribution margin 80,400 60 % Fixed expenses 15,000 Net operating income $ 65,400 Required: 1. What is the company’s degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 14% increase in sales. 3. Construct a new contribution format income statement for the company assuming a 14% increase in sales.
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iller Company's contribution format income statement for the most recent month is shown below: Total Per Unit Sales (32,000 units) $ 160,000 $5.00 Variable expenses 64,000 2.00 Contribution margin 96,000 $ 3.00 Fixed expenses 50,000 Net operating income $ 46,000 Required: (Consider each case independently): 1. What is the revised net operating income if unit sales increase by 12% ? 2. What is the revised net operating income if the selling price decreases by $1.30 per unit and the number of units sold increases by 22% ? 3. What is the revised net operating income if the selling price increases by $1.30 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 4% ? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 40 cents per unit, and the number of units sold decreases by 12% ?
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Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 130,000 100% Variable expenses 52,000 40% Contribution margin 78,000 60% Fixed expenses 20,000 Net operating income $ 58,000 Required: What is the company’s degree of operating leverage? Using the degree of operating leverage, estimate the impact on net operating income of a 25% increase in unit sales. (not able to upload a third image) but I need the correct answer to what is the "net operating income" Construct a new contribution format income statement for the company assuming a 25% increase in unit sales.

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