Required information [The following information applies to the questions displayed below.] Astro Company sold 20,500 units of its only product and reported income of $77,400 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 49% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $151,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($51 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income $ 1,045, 500 861,000 184,500 107, 100 $ 77,400 Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal aces.)
Required information [The following information applies to the questions displayed below.] Astro Company sold 20,500 units of its only product and reported income of $77,400 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 49% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $151,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($51 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income $ 1,045, 500 861,000 184,500 107, 100 $ 77,400 Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal aces.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: accounting
![Required information
[The following information applies to the questions displayed below.]
Astro Company sold 20,500 units of its only product and reported income of $77,400 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 49% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $151,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($51 per unit)
Variable costs ($42 per unit)
Contribution margin
Fixed costs
Income
$ 1,045,500
61,000
184,500
107, 100
$ 77,400
Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal
places.)
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Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Astro Company sold 20,500 units of its only product and reported income of $77,400 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 49% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $151,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($51 per unit)
Variable costs ($42 per unit)
Contribution margin
Fixed costs
Income
$ 1,045,500
61,000
184,500
107, 100
$ 77,400
Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal
places.)
Prev
S
CO.
S
SA
352
1 2 3
.
of 91
www
815
Next >

Transcribed Image Text: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
Contribution Margin Ratio
Numerator:
1
1
Proposed
Denominator:
Break-even point in dollar sales with new machine:
Numerator:
1
1
Denominator:
Contribution Margin Ratio
Contribution margin ratio
Break-Even Point in Dollars
Break-even point in dollars
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