quired informationfollowing information applies to the questionslayed below.]o Company sold 28,000 units of its only product andorted income of $161,000 for the current year. During aning session for next year's activities, the productionager notes that variable costs can be reduced 40% byalling a machine that automates several operations. Toin these savings, the company must increase its annual1 costs by $143,000. Total units sold and the selling priceunit will not change.ASTRO COMPANYContribution Margin Income StatementFor Year Ended December 31les ($56 per unit)riable costs ($42 per unit)ntribution margin.xed costscome1 marginbution Margin Ratioumerator:ute the break-even point in dollar sales for next yearg the machine is installed. (Round your answers to 2places.)11$ 1,568,0001,176,000392,000231,000$ 161,000point in dollar sales with new machine:umerator:11Denominator:Denominator:Per unit= Contribution Margin RatioContribution margin ratio== Break-Even Point in Dollars= Break-even point in dollars Required information[The following information applies to the questionsdisplayed below.]Astro Company sold 28,000 units of its only product andreported income of $161,000 for the current year. During aplanning session for next year's activities, the productionmanager notes that variable costs can be reduced 40% byinstalling a machine that automates several operations. Toobtain these savings, the company must increase its annualfixed costs by $143,000. Total units sold and the selling priceper unit will not change.ASTRO COMPANYContribution Margin Income StatementFor Year Ended December 31Sales ($56 per unit)Variable costs ($42 per unit)Contribution marginFixed costsIncomeContribution margin1. Compute the break-even point in dollar sales for next yearassuming the machine is installed. (Round your answers to 2decimal places.)Contribution Margin RatioNumerator:11$ 1,568,0001,176,000392,000231,000$ 161,000Break-even point in dollar sales with new machine:Numerator:11Denominator:Denominator:Per unit= Contribution MarContribution marg=Break-Even PointBreak-even point i

Answered: Image /qna-images/answer/632fed33-f328-463d-a361-27c100047ac2.jpg

quired information following information applies to the questions layed below.] o Company sold 28,000 units of its only product and orted income of $161,000 for the current year. During a ning session for next year's activities, the production ager notes that variable costs can be reduced 40% by alling a machine that automates several operations. To in these savings, the company must increase its annual 1 costs by $143,000. Total units sold and the selling price unit will not change. ASTRO COMPANY

quired information following information applies to the questions layed below.] o Company sold 28,000 units of its only product and orted income of $161,000 for the current year. During a ning session for next year's activities, the production ager notes that variable costs can be reduced 40% by alling a machine that automates several operations. To in these savings, the company must increase its annual 1 costs by $143,000. Total units sold and the selling price unit will not change. ASTRO COMPANY

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5PB: Wellington, Inc., reports the following contribution margin income statement for the month of May....

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Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)
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Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?
Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
Wellington, Inc., reports the following contribution margin income statement for the month of May. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $10 but will increase fixed costs by 20%. Prepare a projected contribution margin income statement for Wellington, Inc., assuming it purchases the new equipment. Assume sales level remains unchanged.
Required information [The following information applies to the questions displayed below.] Astro Company sold 26,500 units of its only product and reported income of $246,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 60% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $150,000. 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 ($35 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 $1,325,000. (Do not round intermediate calculations. Round your answers to the…
Required information (The following information applies to the questions displayed below] Astro Company sold 25,000 units of its only product and reported income of $117,600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $149,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Incone Statenent For Year Ended December 31 Sales ($40 per unit) $ 1,000,000 800,000 Variable costs ($32 per unit) Contribution margin Fixed costs 200,000 82,400 Incone $ 117,600 ces 2 Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,000,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO…
[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)…
[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 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 Contribution Margin Ratio Numerator: Contribution margin per unit $ 1 Fixed costs per unit $ 1,237,500 1,125,000 112,500 52,500 $ 60,000 $ Denominator: Selling price…
[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 Contribution margin 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 Ratio Numerator: 1 1 $ 1,237,500 1,125,000 112,500 52,500 $ 60,000 Break-even point in dollar sales with new machine: Numerator: 1 1 Denominator:…
[The following information applies to the questions displayed below.] Astro Company sold 20,000 units of its only product and reported income of $25,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $241,000. 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 ($40 per unit) Contribution margin Fixed costs Income 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Contribution Margin Per Unit Contribution Margin Ratio Numerator: 1 1 $ 1,000,000 800,000 200,000 175,000 $ 25,000 Break-Even Point in Dollar Sales with New Machine: Numerator: 1 1 Proposed Denominator: Denominator: = = = Contribution Margin Ratio…
[The following information applies to the questions displayed below.] Astro Company sold 20,000 units of its only product and reported income of $25,000 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $241,000. 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 ($40 per unit) Contribution margin Fixed costs Income 3. Compute the sales level required in both dollars and units to earn $208,000 of target income for next year with the machine installed. Sales level required in dollars Numerator: Sales level required in units Numerator: 1 1 $ 1,000,000 800,000 200,000 175,000 $ 25,000 " 1 Denominator: Denominator: = = Sales dollars required Sales units…