Required information [The following information applies to the questions displayed below.] Astro Company sold 28,000 units of its only product and reported income of $161,000 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 $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31. Sales ($56 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 $ 1,568,000 1,176,000 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,568,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Contribution margin 392,000 231,000 $ 161,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Required information
[The following information applies to the questions
displayed below.]
Astro Company sold 28,000 units of its only product and
reported income of $161,000 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 $143,000. Total units sold and the selling price
per unit will not change.
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Sales ($56 per unit)
Variable costs ($42 per unit)
Contribution margin
Fixed costs
Income
ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31
$ 1,568,000
1,176,000
2. Prepare a contribution margin income statement for next
year that shows the expected results with the machine
installed. Assume sales are $1,568,000. (Do not round
intermediate calculations. Round your answers to the
nearest whole dollar.)
Contribution margin
392,000
231,000
$ 161,000
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Astro Company sold 28,000 units of its only product and reported income of $161,000 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 $143,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) Variable costs ($42 per unit) Contribution margin Fixed costs Income ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 $ 1,568,000 1,176,000 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,568,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Contribution margin 392,000 231,000 $ 161,000
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