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 For Year Ended December 311 Sales ($50 per unit) Variable costs ($40 per unit). Contribution margin Fixed costs Income $ 1,000,000 800,000 200,000 175,000 $ 25,000 Problem 21-3A (Static) Part 3 3. Compute the sales level required in both dollars and units to earn $208,000 of target income for next year with the machine installed. Sales level required in dollars Numerator: Sales level required in units Denominator: Sales dollars required Numerator: Denominator: =- Sales units required 9 < Prev 18 of 18 Next