Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 46% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $154,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($54 per unit) Variable costs ($48 per unit) Contribution margin Fixed costs Income $ 1,188,000 1,056,000 132,000 61,800 $ 70,200 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.)
Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 46% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $154,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($54 per unit) Variable costs ($48 per unit) Contribution margin Fixed costs Income $ 1,188,000 1,056,000 132,000 61,800 $ 70,200 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 46% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $154,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($54 per unit)
Variable costs ($48 per unit)
Contribution margin
Fixed costs
Income
$ 1,188,000
1,056,000
132,000
61,800
$ 70,200
1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal
places.)
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