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 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.
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 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.
Cornerstones of Cost Management (Cornerstones Series)
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Chapter16: Cost-volume-profit Analysis
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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
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.
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