Required information Problem 18-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below] Astro Company sold 24,500 units of its only product and reported income of $210,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 41% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $159,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($59 per unit) Variable costs ($41 per unit) Contribution margin Fixed costs Income $ 1,445,500 1,004,500 441,000 210,400 $ 210,000 Problem 18-3A (Algo) Part 3 3. Compute the sales level required in both dollars and units to earn $290.000 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 nearest whole percentage)
Required information Problem 18-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2 [The following information applies to the questions displayed below] Astro Company sold 24,500 units of its only product and reported income of $210,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 41% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $159,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($59 per unit) Variable costs ($41 per unit) Contribution margin Fixed costs Income $ 1,445,500 1,004,500 441,000 210,400 $ 210,000 Problem 18-3A (Algo) Part 3 3. Compute the sales level required in both dollars and units to earn $290.000 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 nearest whole percentage)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please help me
Transcribed Image Text:12
Part
Required information
Problem 18-3A (Algo) Break-even analysis; income targeting and strategy LO C2, A1, P2
[The following information applies to the questions displayed below.)
Astro Company sold 24,500 units of its only product and reported income of $210,600 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 41% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $159,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($59 per unit)
Variable costs ($41 per unit)
Contribution margin
Fixed costs
Income
$1,445,500
1,004,500
441,000
210,400
$ 210,000
Problem 18-3A (Algo) Part 3
3. Compute the sales level required in both dollars and units to earn $290,000 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
nearest whole percentage)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education