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 3. Compute the sales level required in both dollars and units to earn $260,000 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 dollars Numerator: Sales level required in units Numerator: Denominator: Sales dollars required ° Denominator: Sales units required °
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 3. Compute the sales level required in both dollars and units to earn $260,000 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 dollars Numerator: Sales level required in units Numerator: Denominator: Sales dollars required ° Denominator: 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 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
3. Compute the sales level required in both dollars and units to earn $260,000 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 dollars
Numerator:
Denominator:
= Sales dollars required
Sales level required in units
Numerator:
Denominator:
=
1
Sales units required](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F717983f8-495e-4a56-83c8-3d922f6b72d5%2Fca0ecc8a-3e7f-4237-b496-fc4dea7a2c4b%2Fd28wqsh_processed.jpeg&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
3. Compute the sales level required in both dollars and units to earn $260,000 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 dollars
Numerator:
Denominator:
= Sales dollars required
Sales level required in units
Numerator:
Denominator:
=
1
Sales units required
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