Chapter 5 Homework Saved 9 Part of Problem 5-3A (Static) Break-even analysis; income targeting and strategy LO C2, A1, P2 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 Tor Year Ended December 31 Sales (550 per unit) $ 1.000.000 Variable coste (540 per unit) 300,000 Contribution margin 200.000 Fixed costo 175.000 $. 25.000 4 points Sed Book Theone PE Problem 5-3A (Static) Part t 1 1. Compute the break-even point in dollar sales for next year assuming the machine is installed. Contribution Margin Per Unit Proposed $ 0 Contribution Margin Ratio Numerator: Denominator: Contribution Margin Ratio Contribution margin ratio 0 Break-Even Point in Dollar Sales with New Machine: Numerator: 1 Denominator: Break-even Point in Dollars Break-even point in dollars