[The tollowing Astro Co. sold 20,800 units of its only product and incurred a $56,672 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 $158,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 $796,640 637,312 159,328 • 216,000 Sales Variable costs Contribution margin Fixed costs Net loss $(56,672)

[The tollowing Astro Co. sold 20,800 units of its only product and incurred a $56,672 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 $158,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 $796,640 637,312 159,328 • 216,000 Sales Variable costs Contribution margin Fixed costs Net loss $(56,672)

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter18: Cost-volume-profit Analysis (cvp)

Section: Chapter Questions

Problem 1R: Poleski Manufacturing, which maintains the same level of inventory at the end of each year, provided...

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Required information [The following information applies to the questions displayed below.] Astro Co. sold 19,200 units of its only product and incurred a $43,072 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 $142,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 $704,640 563,712 140,928 Sales Variable costs Contribution margin Fixed costs 184,000 Net loss $(43,072) 3. Prepare a forecasted contribution margin income statement for 2020 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due. (Do not…
[The following information applies to the questions displayed below.] Astro Co. sold 19,200 units of its only product and incurred a $43,072 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 $142,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 $704,640 563,712 Sales Variable costs Contribution margin Fixed costs 140,928 184,000 Net loss $ (43,072) Required: . Compute the break-even point in dollar sales for 2019. (Round your answers to 2 decimal places.) Contribution Margin Per Unit Current Year $ 0.00 Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio…
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Astro Co. sold 19,800 units of its only product and incurred a $48,292 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020’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 $148,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANYContribution Margin Income StatementFor Year Ended December 31, 2019 Sales $ 738,540 Variable costs 590,832 Contribution margin 147,708 Fixed costs 196,000 Net loss $ (48,292 ) Compute the sales level required in both dollars and units to earn $180,000 of target pretax income in 2020 with the machine installed and no change in unit sales price Sales level required in dollars Choose Numerator: / Choose Denominator: = Sales Dollars…
Astro Co. sold 19,800 units of its only product and incurred a $48,292 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020’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 $148,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANYContribution Margin Income StatementFor Year Ended December 31, 2019 Sales $ 738,540 Variable costs 590,832 Contribution margin 147,708 Fixed costs 196,000 Net loss $ (48,292 ) Contribution Margin Per Unit Current Year Contribution Margin Ratio Choose Numerator: / Choose Denominator: = Contribution Margin Ratio / = Contribution margin ratio Break-Even Point in Dollar Sales:…
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…
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Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020’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 $200,000. The maximum output capacity of the company is 40,000 units per year. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,000,000 Variable costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 Contribution margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000 Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .…
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