Question $3-$ Chapter $21$

Measuring Cost Behavio

ttps:$//$ezto$.$mheducation.com$/$ext$/$map$/$index$.$html$?\_$con$=$con$8$ex$...$

ignment

Help

Sove $5$ Ex

$(1$

Required information

$($The following information applies to the questions displayed below$)$

Astro Company sold $20,000$ units of its only product and reported income of $$25,000$ for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced $40\%$ by installing a machine that automates several operations. To obtain these strings, the company must increase its annual fued costs by $$241,000.$ The selling price per unit will not change

$\backslash$table$[[$ASTRD COPPANY$],[$Contribution Margin Income Statement For Year Inded Decenber $31],[$Sales $($$$50$ per unit$),$$ $1,400,000],[$Variable costs $($$$40$ per unit$),800,000],[$Contriltution margin,$200,000],[$Fixed costs,$175,000],[$Income$,$$ $25,000]]$

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

$\backslash$table$[[$Contribution margin,$$,90,],[$Contribution Margin Ratio$],[$Numerator:$,1,$Denomination:,$-,$Contribution Margin Ratio$],[$Contribution margen per unt,I,Selling price per unt,$=,$Cortribution margentabo$],[$$ $10,$I,$350,\%,20\%],[$Break Even Point in Dollar Sales with New Machine:$],[$Numerator:$,1,$Denomination:,$-,$Break$-$Even Point in Dollars$],[$Total faxed costs,$1,$Contibulion margin ratio,$=,$Break$-$even point in dollars$],[$$ $175\mathrm{.}000,1,20\%,=,$$ $875,000]]$

Prey

$$

$3$

of $5$

Next