Astro Company sold 29,000 units of its only product and reported income of $37,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $141,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($50 per unit) Variable costs ($48 per unit) Contribution margin Fixed costs Income $ 1,450,000 1,392,000 58,000 20, 200 $ 37,800
Astro Company sold 29,000 units of its only product and reported income of $37,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $141,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($50 per unit) Variable costs ($48 per unit) Contribution margin Fixed costs Income $ 1,450,000 1,392,000 58,000 20, 200 $ 37,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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hh.2
![Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2
[The following information applies to the questions displayed below.]
Astro Company sold 29,000 units of its only product and reported income of $37,800 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by
installing a machine that automates several operations. To obtain these savings, the company must increase its
annual fixed costs by $141,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
$
Sales ($50 per unit)
Variable costs ($48 per unit)
Contribution margin
Fixed costs
Income
Problem 21-3A (Algo) Part 2
1,450,000
1,392,000
58,000
20,200
$ 37,800](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc73a9032-bc77-4d01-9c62-1c3406bc3811%2F633fa5c4-0dcd-44ad-9730-a4235ed48300%2Fil0zm6m_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 21-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2
[The following information applies to the questions displayed below.]
Astro Company sold 29,000 units of its only product and reported income of $37,800 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by
installing a machine that automates several operations. To obtain these savings, the company must increase its
annual fixed costs by $141,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
$
Sales ($50 per unit)
Variable costs ($48 per unit)
Contribution margin
Fixed costs
Income
Problem 21-3A (Algo) Part 2
1,450,000
1,392,000
58,000
20,200
$ 37,800
Transcribed Image Text:2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume
sales are $1,450,000.
Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar.
X Answer is not complete.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales
Variable costs
Contribution margin
Fixed costs
Income
0
0
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