Astro Company sola 20,500 units of its only product and reported income of $71,400 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 49% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $151,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($51 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income $ 1,045,500 861,000 184,500 107,100 $ 77,400 1. 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 margin Contribution Margin Ratio Per unit Numerator: Denominator: Break-even point in dollar sales with new machine: Numerator: Contribution Margin Ratio Contribution margin ratio Denominator: Break-Even Point in Dollars
Astro Company sola 20,500 units of its only product and reported income of $71,400 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 49% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $151,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($51 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income $ 1,045,500 861,000 184,500 107,100 $ 77,400 1. 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 margin Contribution Margin Ratio Per unit Numerator: Denominator: Break-even point in dollar sales with new machine: Numerator: Contribution Margin Ratio Contribution margin ratio Denominator: Break-Even Point in Dollars
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...
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![Astro Company sola 20,500 units of its only product and reported income of $71,400 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 49% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $151,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($51 per unit)
Variable costs ($42 per unit)
Contribution margin
Fixed costs
Income
$ 1,045,500
861,000
184,500
107,100
$ 77,400
1. 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 margin
Contribution Margin Ratio
Per unit
Numerator:
Denominator:
Break-even point in dollar sales with new machine:
Numerator:
Contribution Margin Ratio
Contribution margin ratio
Denominator:
Break-Even Point in Dollars](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa86a1035-1347-4c62-9c6e-1963efc8bcf3%2F22d51e83-cf1b-417a-badb-269dd0c420f5%2Fotx55jc_processed.png&w=3840&q=75)
Transcribed Image Text:Astro Company sola 20,500 units of its only product and reported income of $71,400 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 49% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $151,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($51 per unit)
Variable costs ($42 per unit)
Contribution margin
Fixed costs
Income
$ 1,045,500
861,000
184,500
107,100
$ 77,400
1. 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 margin
Contribution Margin Ratio
Per unit
Numerator:
Denominator:
Break-even point in dollar sales with new machine:
Numerator:
Contribution Margin Ratio
Contribution margin ratio
Denominator:
Break-Even Point in Dollars
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