Required information [The following information applies to the questions displayed below.) Astro Company sold 24,000 units of its only product and reported income of $174,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 42% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $158,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($58 per unit) Variable costs ($39 per unit) Contribution margin Fixed costs Income Sales level required in dollars Numerator: $ 1,392,000 3. Compute the sales level required in both dollars and units to earn $280,000 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 units Numerator 936,000 456,000 281,200 $ 174,800 Denominator: Denominator: Sales dollars required Sales units required
Required information [The following information applies to the questions displayed below.) Astro Company sold 24,000 units of its only product and reported income of $174,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 42% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $158,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($58 per unit) Variable costs ($39 per unit) Contribution margin Fixed costs Income Sales level required in dollars Numerator: $ 1,392,000 3. Compute the sales level required in both dollars and units to earn $280,000 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 units Numerator 936,000 456,000 281,200 $ 174,800 Denominator: Denominator: Sales dollars required Sales units required
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 24,000 units of its only product and reported income of $174,800 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 42% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $158,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement.
For Year Ended December 31
Sales ($58 per unit)
Variable costs ($39 per unit)
Contribution margin
Fixed costs
Income
Sales level required in dollars
Numerator:
$ 1,392,000.
3. Compute the sales level required in both dollars and units to earn $280,000 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 units
Numerator:
936,000
456,000
281,200
$ 174,800
Denominator:
Denominator:
Sales dollars required
Sales units required](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F00fb4005-84d2-4cf7-8cde-7453c8feeadd%2Fa3ac5610-3fa1-4306-a5e0-b5531cc8fc19%2Fr12xpmk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Astro Company sold 24,000 units of its only product and reported income of $174,800 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 42% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $158,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement.
For Year Ended December 31
Sales ($58 per unit)
Variable costs ($39 per unit)
Contribution margin
Fixed costs
Income
Sales level required in dollars
Numerator:
$ 1,392,000.
3. Compute the sales level required in both dollars and units to earn $280,000 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 units
Numerator:
936,000
456,000
281,200
$ 174,800
Denominator:
Denominator:
Sales dollars required
Sales units required
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