Required information [The following information applies to the questions displayed below] Astro Company sold 26,500 units of its only product and reported income of $246,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 60% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $150,000. 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 ($35 per unit) Contribution margin Fixed costs Income 3. Compute the sales level required in both dollars and units to earn $160,000 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) Sales level required in dollars Numerator: $ 1,325,000 927,500 397,500 151,500 $ 246,000 Sales level required in units Numerator: Denominator: Denominator: Sales dollars required Sales units required
Required information [The following information applies to the questions displayed below] Astro Company sold 26,500 units of its only product and reported income of $246,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 60% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $150,000. 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 ($35 per unit) Contribution margin Fixed costs Income 3. Compute the sales level required in both dollars and units to earn $160,000 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) Sales level required in dollars Numerator: $ 1,325,000 927,500 397,500 151,500 $ 246,000 Sales level required in units Numerator: Denominator: Denominator: Sales dollars required Sales units required
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku
![Required information
[The following information applies to the questions displayed below.]
Astro Company sold 26,500 units of its only product and reported income of $246,000 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 60% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $150,000. 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 ($35 per unit)
Contribution margin
Fixed costs
Income
3. Compute the sales level required in both dollars and units to earn $160,000 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)
Sales level required in dollars
Numerator:
$ 1,325,000
927,500
397,500
151.500
$ 246,000
Sales level required in units
Numerator:
Denominator:
Denominator:
Sales dollars required
Sales units required](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F83734d13-bd6b-4c02-8f8a-c9e837c52833%2F8eb3e933-d28f-45a4-a083-fd015a236133%2Fvmjbzf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Astro Company sold 26,500 units of its only product and reported income of $246,000 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 60% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $150,000. 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 ($35 per unit)
Contribution margin
Fixed costs
Income
3. Compute the sales level required in both dollars and units to earn $160,000 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)
Sales level required in dollars
Numerator:
$ 1,325,000
927,500
397,500
151.500
$ 246,000
Sales level required in units
Numerator:
Denominator:
Denominator:
Sales dollars required
Sales units required
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