Astro Company sold 28,500 units of its only product and reported income of $57,900 for the current year. During aplanning session for next year's activities, the production manager notes that variable costs can be reduced 50% byinstalling a machine that automates several operations. To obtain these savings, the company must increase its annualfixed costs by $142,000. Total units sold and the selling price per unit will not change.ASTRO COMPANYContribution Margin Income StatementFor Year Ended December 31Sales ($50 per unit)Variable costs ($47 per unit)Contribution marginFixed costsIncome1. Compute the break-even point in dollar sales for next year assuming the machine is installed.Note: Round your answers to 2 decimal places.Contribution marginContribution Margin RatioNumerator:Contribution margin per unit1Total fixed costs$ 1,425,0001,339,50085,50027,600$ 57,9001Denominator:Selling price per unitBreak-even point in dollar sales with new machine:Numerator:Denominator:1 Contribution margin ratioPer unit===Contribution Margin RatioContribution margin ratio0Break-Even Point in DollarsBreak-even point in dollars0

Income statement is a financial statement that shows profitability, total revenue and total…

Answered: Astro Company sold 28,500 units of its…

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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