Required information [The following information applies to the questions displayed below.] Astro Company sold 22,500 units of its only product and reported income of $60,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 45% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $155,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($55 per unit) Variable costs ($50 per unit) Contribution margin Fixed costs Income $ 1,237,500 1,125,000 112,500 52,500 $ 60,000 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Note: Round your answers to 2 decimal places.
Required information [The following information applies to the questions displayed below.] Astro Company sold 22,500 units of its only product and reported income of $60,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 45% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $155,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($55 per unit) Variable costs ($50 per unit) Contribution margin Fixed costs Income $ 1,237,500 1,125,000 112,500 52,500 $ 60,000 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Note: Round your answers to 2 decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
Astro Company sold 22,500 units of its only product and reported income of $60,000 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 45% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $155,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($55 per unit)
Variable costs ($50 per unit)
Contribution margin
Fixed costs
Income
$ 1,237,500
1,125,000
112,500
52,500
$ 60,000
1. Compute the break-even point in dollar sales for next year assuming the machine is installed.
Note: Round your answers to 2 decimal places.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3648e63c-5f72-43ae-9547-3b45613e4e55%2F05279826-0df7-4ca4-a658-73e0188befc3%2Fw2tco6s_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Astro Company sold 22,500 units of its only product and reported income of $60,000 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 45% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $155,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($55 per unit)
Variable costs ($50 per unit)
Contribution margin
Fixed costs
Income
$ 1,237,500
1,125,000
112,500
52,500
$ 60,000
1. Compute the break-even point in dollar sales for next year assuming the machine is installed.
Note: Round your answers to 2 decimal places.
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