[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 Sales level required in dollars Numerator: $ 1,237,500 1,125,000 3. Compute the sales level required in both dollars and units to earn $250,000 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: 112,500 52,500 $ 60,000 Denominator: Denominator: = Sales do Sales un
[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 Sales level required in dollars Numerator: $ 1,237,500 1,125,000 3. Compute the sales level required in both dollars and units to earn $250,000 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: 112,500 52,500 $ 60,000 Denominator: Denominator: = Sales do Sales un
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
![[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
Sales level required in dollars
Numerator:
3. Compute the sales level required in both dollars and units
to earn $250,000 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:
1
1
$ 1,237,500
1,125,000
1
1
112,500
52,500
$ 60,000
Denominator:
Denominator:
Sales do
Sales un](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe4ef7d4e-7bd8-47a7-b82d-4b0aca1efaff%2Fa60e0fc8-59e2-4852-ac57-ba32d68640d5%2Fhzobsc9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[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
Sales level required in dollars
Numerator:
3. Compute the sales level required in both dollars and units
to earn $250,000 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:
1
1
$ 1,237,500
1,125,000
1
1
112,500
52,500
$ 60,000
Denominator:
Denominator:
Sales do
Sales un
![uired information
Following information applies to the questions
yed below.]
Company sold 22,500 units of its only product and
ted income of $60,000 for the current year. During a
ing session for next year's activities, the production
ger notes that variable costs can be reduced 45% by
ing a machine that automates several operations. To
these savings, the company must increase its annual
costs by $155,000. Total units sold and the selling price
it will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
es ($55 per unit)
iable costs ($50 per unit)
tribution margin
ed costs
>me
equired in dollars
Numerator:
ite the sales level required in both dollars and units
250,000 of target income for next year with the
installed. (Do not round intermediate calculations.
our answers to 2 decimal places. Round
ution margin ratio" to nearest whole percentage)
equired in units
Numerator:
1
$ 1,237,500
1,125,000
1
1
112,500
52,500
$ 60,000
Denominator:
Denominator:
=
=
Sales dollars required
Sales units required
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe4ef7d4e-7bd8-47a7-b82d-4b0aca1efaff%2Fa60e0fc8-59e2-4852-ac57-ba32d68640d5%2Fpbtwva_processed.jpeg&w=3840&q=75)
Transcribed Image Text:uired information
Following information applies to the questions
yed below.]
Company sold 22,500 units of its only product and
ted income of $60,000 for the current year. During a
ing session for next year's activities, the production
ger notes that variable costs can be reduced 45% by
ing a machine that automates several operations. To
these savings, the company must increase its annual
costs by $155,000. Total units sold and the selling price
it will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
es ($55 per unit)
iable costs ($50 per unit)
tribution margin
ed costs
>me
equired in dollars
Numerator:
ite the sales level required in both dollars and units
250,000 of target income for next year with the
installed. (Do not round intermediate calculations.
our answers to 2 decimal places. Round
ution margin ratio" to nearest whole percentage)
equired in units
Numerator:
1
$ 1,237,500
1,125,000
1
1
112,500
52,500
$ 60,000
Denominator:
Denominator:
=
=
Sales dollars required
Sales units required
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 7 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education