Astro Company sold 21,000 units of its only product and reported income of $84,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 48% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $152,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($52 per unit) $ 1,092,000 Variable costs ($44 per unit) 924,000 Contribution margin 168,000 Fixed costs 83,200 Income $ 84,800 3. Compute the sales level required in both dollars and units to earn 220000 of target income for next year with the machine installed. Note: do not round intermediate calculations. Round your answers to decimal places. Round "contributions margin ratio" to nearest whole percentage.
Astro Company sold 21,000 units of its only product and reported income of $84,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 48% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $152,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($52 per unit) $ 1,092,000 Variable costs ($44 per unit) 924,000 Contribution margin 168,000 Fixed costs 83,200 Income $ 84,800 3. Compute the sales level required in both dollars and units to earn 220000 of target income for next year with the machine installed. Note: do not round intermediate calculations. Round your answers to decimal places. Round "contributions margin ratio" to nearest whole percentage.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...
Related questions
Question
Astro Company sold 21,000 units of its only product and reported income of $84,800 for the current year.
During a planning session for next year's activities, the production manager notes that variable costs can be reduced 48% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $152,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income
Statement
For Year Ended December 31
Sales ($52 per unit) $ 1,092,000
Variable costs ($44 per unit) 924,000
Contribution margin 168,000
Fixed costs
83,200
Income
$ 84,800
3. Compute the sales level required in both dollars and units to earn 220000 of target income for next year with the machine installed.
Note: do not round intermediate calculations. Round your answers to decimal places. Round
"contributions margin ratio" to nearest whole percentage.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning