Astro Company sold 22,500 units of its only product and reported income of $60,000 for the...

 

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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 $ 1,237,500 1,125,000 112,500 52,500 $ 60,000 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,237,500. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin 0 $ 0 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 $ 1,237,500 1,125,000 112,500 52,500 $ 60,000 2. Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,237,500. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin 0 $ 0

Answer rating: 100% (QA)

Given Current sales 22500 units at 55 per unit totaling 1237500 Variable costs 50 per unit ... View the full answer