A company sold 5,600 units of its only product and reported the following contribution margin income...

Transcribed Image Text:

A company sold 5,600 units of its only product and reported the following contribution margin income statement for this year. Contribution Margin Income Statement For Year Ended December 31 Sales ($70 per unit) Variable costs ($56 per unit) Contribution margin Fixed costs Incone $ 392,000 313,600 78,400 47,600 $ 38,800 For next year, management estimates that variable costs per unit can be reduced by $21 by installing a new machine. To obtain these savings, the company must increase its annual fixed costs by $61,600. The selling price per unit will not change. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the break-even point in dollar sales for next year assuming the new machine is installed. Numerator: Contribution Margin Ratio Denominator Contribution Margin Ratio Contribution margin ratio Break-Even Point in Dollar Sales with New Machine: Numerator Denominator: Break-Even Point in Dollars Break-even point in dollars A company sold 5,600 units of its only product and reported the following contribution margin income statement for this year. Contribution Margin Income Statement For Year Ended December 31 Sales ($70 per unit) Variable costs ($56 per unit) Contribution margin Fixed costs Incone $ 392,000 313,600 78,400 47,600 $ 38,800 For next year, management estimates that variable costs per unit can be reduced by $21 by installing a new machine. To obtain these savings, the company must increase its annual fixed costs by $61,600. The selling price per unit will not change. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the break-even point in dollar sales for next year assuming the new machine is installed. Numerator: Contribution Margin Ratio Denominator Contribution Margin Ratio Contribution margin ratio Break-Even Point in Dollar Sales with New Machine: Numerator Denominator: Break-Even Point in Dollars Break-even point in dollars

Answer rating: 100% (QA)

To compute the breakeven point in dollar sales for next year we need to calculate the co... View the full answer