Astro Company sold 24,000 units of its only product and reported income of $174,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 42% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $158,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($58 per unit) Variable costs ($39 per unit) Contribution margin Fixed costs Income $ 1,392,000 936,000 456,000 281, 200 $ 174,800 3. Compute the sales level required in both dollars and units to earn $280,000 of target income for next year with the machine installed. (Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to t wholo porcent

Astro Company sold 24,000 units of its only product and reported income of $174,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 42% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $158,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($58 per unit) Variable costs ($39 per unit) Contribution margin Fixed costs Income $ 1,392,000 936,000 456,000 281, 200 $ 174,800 3. Compute the sales level required in both dollars and units to earn $280,000 of target income for next year with the machine installed. (Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to t wholo porcent

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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