Problem 21-4A Break-even analysis; income targeting and forecasting C2 P2 A1 Astro Co. sold rred a $50,000 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2018's activities, the production manager notes thatvar able costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $200,00o. The maximum output capacity of the company is 40,000 units per year. 20,000 units of its only product and incu $1,000,000 800,000 200,000 250,000 (50,000) Sales Required 1. Compute the break-even point in dollar sales Variable costs Contribution margin for year 2017. 2. Compute the predicted break-even point in Fixed costs Net loss dollar sales for year 2018 assuming the machine is installed and there is no change in the unit selling price. 3. Prepare a forecasted contribution margin income statement for 2018 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due. Check (3) Net income, $150,000 Compute the sales level required in both dollars and units to earn $200,000 of target pretax income in 2018 with the machine installed and no change in unit sales price. Round answers to whole dollars and whole units. (4) Required sales, $1,083,333 or 21,667 units (both rounded) Prepare a forecasted contribution margin income statement that shows the results at the sales level computed in part 4. Assume no income taxes will be due. 4. 5