Astro Company sold 21,000 units of its only product and reported income of $84,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 48% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $152,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($52 per unit) $ 1,092,000 Variable costs ($44 per unit) 924,000 Contribution margin 168,000 Fixed costs 83,200 Income $ 84,800 3. Compute the sales level required in both dollars and units to earn 220000 of target income for next year with the machine installed. Note: do not round intermediate calculations. Round your answers to decimal places. Round "contributions margin ratio" to nearest whole percentage.
Astro Company sold 21,000 units of its only product and reported income of $84,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 48% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $152,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($52 per unit) $ 1,092,000 Variable costs ($44 per unit) 924,000 Contribution margin 168,000 Fixed costs 83,200 Income $ 84,800 3. Compute the sales level required in both dollars and units to earn 220000 of target income for next year with the machine installed. Note: do not round intermediate calculations. Round your answers to decimal places. Round "contributions margin ratio" to nearest whole percentage.
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 21,000 units of its only product and reported income of $84,800 for the current year.
During a planning session for next year's activities, the production manager notes that variable costs can be reduced 48% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $152,000. Total units sold and the selling price per unit will not change.
ASTRO COMPANY
Contribution Margin Income
Statement
For Year Ended December 31
Sales ($52 per unit) $ 1,092,000
Variable costs ($44 per unit) 924,000
Contribution margin 168,000
Fixed costs
83,200
Income
$ 84,800
3. Compute the sales level required in both dollars and units to earn 220000 of target income for next year with the machine installed.
Note: do not round intermediate calculations. Round your answers to decimal places. Round
"contributions margin ratio" to nearest whole percentage.
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