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 ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,237,500. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Contribution margin $ 1,237,500 1,125,000 $ 0 112,500 52,500 $ 60,000 0
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 ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,237,500. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Contribution margin $ 1,237,500 1,125,000 $ 0 112,500 52,500 $ 60,000 0
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
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
2. Prepare a contribution margin income statement for next
year that shows the expected results with the machine
installed. Assume sales are $1,237,500. (Do not round
intermediate calculations. Round your answers to the
nearest whole dollar.)
Contribution margin
$ 1,237,500
1,125,000
$
0
112,500
52,500
$ 60,000
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe4ef7d4e-7bd8-47a7-b82d-4b0aca1efaff%2F482f4f8a-d500-48f6-88a9-93846c65b820%2Ffuxvdxo_processed.jpeg&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
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
2. Prepare a contribution margin income statement for next
year that shows the expected results with the machine
installed. Assume sales are $1,237,500. (Do not round
intermediate calculations. Round your answers to the
nearest whole dollar.)
Contribution margin
$ 1,237,500
1,125,000
$
0
112,500
52,500
$ 60,000
0
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