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 ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 $ 1,568,000 1,176,000 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,568,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Contribution margin 392,000 231,000 $ 161,000
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 ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 $ 1,568,000 1,176,000 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,568,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Contribution margin 392,000 231,000 $ 161,000
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....
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