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es Required information [The following information applies to the questions displayed below] Astro Company sold 28,000 units of its only product and reported income of $161,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income Contribution Margin per unit i 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.) Contribution Margin Ratio Numerator: $1,560,000 1,176,000 392,000 231,000 $ 161,000 Break even point in dollar sales with new machine: Numerator: Proposed Denominator: Denominator: = Contribution Margin Ratio Contribution margin ratio Break Even Point in Dollars Break-even point in dollars 9 III

es Required information [The following information applies to the questions displayed below] Astro Company sold 28,000 units of its only product and reported income of $161,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income Contribution Margin per unit i 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.) Contribution Margin Ratio Numerator: $1,560,000 1,176,000 392,000 231,000 $ 161,000 Break even point in dollar sales with new machine: Numerator: Proposed Denominator: Denominator: = Contribution Margin Ratio Contribution margin ratio Break Even Point in Dollars Break-even point in dollars 9 III

FINANCIAL ACCOUNTING
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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es Required information [The following information applies to the questions displayed below] Astro Company sold 28,000 units of its only product and reported income of $161,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income Contribution Margin per unit i 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.) Contribution Margin Ratio Numerator: $1,560,000 1,176,000 392,000 231,000 $ 161,000 Break even point in dollar sales with new machine: Numerator: Proposed Denominator: Denominator: = Contribution Margin Ratio Contribution margin ratio Break Even Point in Dollars Break-even point in dollars III
Transcribed Image Text:es Required information [The following information applies to the questions displayed below] Astro Company sold 28,000 units of its only product and reported income of $161,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income Contribution Margin per unit i 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.) Contribution Margin Ratio Numerator: $1,560,000 1,176,000 392,000 231,000 $ 161,000 Break even point in dollar sales with new machine: Numerator: Proposed Denominator: Denominator: = Contribution Margin Ratio Contribution margin ratio Break Even Point in Dollars Break-even point in dollars III
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