Astro Company sold 29,000 units of its only product and reported income of $37,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $141,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($50 per unit) Variable costs ($48 per unit) Contribution margin Fixed costs Income ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,450,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Contribution margin $ 1,450,000 1,392,000 $ 58,000 20, 200 $ 37,800 0

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EA: Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of...
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Astro Company sold 29,000 units of its only product and reported income of $37,800 for the current year. During a
planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by
installing a machine that automates several operations. To obtain these savings, the company must increase its annual
fixed costs by $141,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($50 per unit)
Variable costs ($48 per unit)
Contribution margin
Fixed costs
Income
2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume
sales are $1,450,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Contribution margin
$ 1,450,000
1,392,000
58,000
20, 200
$ 37,800
$
0
0
Transcribed Image Text:Astro Company sold 29,000 units of its only product and reported income of $37,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $141,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($50 per unit) Variable costs ($48 per unit) Contribution margin Fixed costs Income 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,450,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin $ 1,450,000 1,392,000 58,000 20, 200 $ 37,800 $ 0 0
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