Required information [The following information applies to the questions displayed below.] Astro Company sold 23,000 units of its only product and reported income of $264,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 44% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $156,000. 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 ($35 per unit) Contribution margin Fixed costs Income $ 1,288,000 805,000 483,000 218,400 $ 264,600 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your a to 2 decimal places.)
Required information [The following information applies to the questions displayed below.] Astro Company sold 23,000 units of its only product and reported income of $264,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 44% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $156,000. 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 ($35 per unit) Contribution margin Fixed costs Income $ 1,288,000 805,000 483,000 218,400 $ 264,600 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your a to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
h7
![Required information
[The following information applies to the questions displayed below.]
Astro Company sold 23,000 units of its only product and reported income of $264,600 for the
current year. During a planning session for next year's activities, the production manager notes that
variable costs can be reduced 44% by installing a machine that automates several operations. To
obtain these savings, the company must increase its annual fixed costs by $156,000. 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 ($35 per unit)
Contribution margin
Fixed costs
Income
$ 1,288,000
805,000
483,000
218,400
$ 264,600
1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers
to 2 decimal places.)
Contribution Margin per unit
Proposed
Sales
Variable costs
Contribution margin
$
Contribution Margin Ratio
Numerator:
Denominator:
Contribution margin per unit
Selling price per unit
Break-even point in dollar sales with new machine:
Numerator:
Total fixed costs
0.00
Contribution Margin Ratio
Contribution margin ratio
0
Denominator:
=
Contribution margin ratio
=
Break-Even Point in Dollars
Break-even point in dollars
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffd0ac313-72eb-4639-b6a5-d48b82c2a0c1%2F9cb249fa-05a1-49f9-ad47-9976fecb14cc%2F8rrzkp_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Astro Company sold 23,000 units of its only product and reported income of $264,600 for the
current year. During a planning session for next year's activities, the production manager notes that
variable costs can be reduced 44% by installing a machine that automates several operations. To
obtain these savings, the company must increase its annual fixed costs by $156,000. 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 ($35 per unit)
Contribution margin
Fixed costs
Income
$ 1,288,000
805,000
483,000
218,400
$ 264,600
1. Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers
to 2 decimal places.)
Contribution Margin per unit
Proposed
Sales
Variable costs
Contribution margin
$
Contribution Margin Ratio
Numerator:
Denominator:
Contribution margin per unit
Selling price per unit
Break-even point in dollar sales with new machine:
Numerator:
Total fixed costs
0.00
Contribution Margin Ratio
Contribution margin ratio
0
Denominator:
=
Contribution margin ratio
=
Break-Even Point in Dollars
Break-even point in dollars
0
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