Problem $18-3$B $($edited$)$

Astro Company sold $20,000$ units of its only product and reported income of $$20,000$ for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced $25\%$ by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $$113,000.$ The selling price per unit will not change.

Required:

Compute the break$-$even point required in both dollars and units for the current year before the machine is installed.

Compute the sales level units required in both dollars and units to earn $$87,000$ of target income for current year before the machine installed.

Compute the break$-$even point in dollar sales and units for next year assuming the machine is installed.

Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $$750,000.$

Compute the sales level units required in both dollars and units to earn $$87,000$ of target income for next year with the machine installed.