Problem $5-3$A $($Algo$)$ Break$-$even analysis; income targeting and strategy LO C$2,$ A$1,$ P$2$

Skip to question

$[$The following information applies to the questions displayed below.$]$

Astro Company sold $28,000$ units of its only product and reported income of $$161,000$ for the current year. During a planning session for next year$$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 $$143,000.$ Total units sold and the selling price per unit will not change.

ASTRO COMPANY

Contribution Margin Income Statement

For Year Ended December $31$

Sales $($$$56$ per unit$)$ $ $1,568,000$

Variable costs $($$$42$ per unit$)1,176,000$

Contribution margin $392,000$

Fixed costs $231,000$

Income $ $161,000$

Problem $5-3$A $($Algo$)$ Part $1$

$1.$ Compute the break$-$even point in dollar sales for next year assuming the machine is installed.

Note: Round your answers to $2$ decimal places.