Required information Problem 21-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1 (The following information applies to the questions displayed below.) Astro Co. sold 19,600 units of its only product and incurred a $46,568 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018's activities, the production manager notes that variable 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 $146,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2017 Sales $ 727,160 Variable costs 581,728 Contribution margin 145, 432 Fixed costs 192,000 Net loss $ (46, 568) Problem 21-4A Part 1 Required: 1. Compute the break-even point in dollar sales for year 2017. (Round your answers to 2 decimal places.) Contribution Margin Per Unit Current Contribution Margin Ratio Choose Numerator: I Choose Denominator: - Contribution Margin Ratio Contribution margin ratio Break-Even Point in Dollar Sales: Choose Numerator: Choose Denominator: Break-Even Point in Dollars = Break-even point in dollars Required information Problem 21-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1 (The following information applies to the questions displayed below.) Astro Co. sold 19,600 units of its only product and incurred a $46,568 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018's activities, the production manager notes that variable 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 $146,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2017 Sales $ 727,160 Variable costs 581,728 Contribution margin 145, 432 Fixed costs 192,000 Net loss $ (46, 568) Problem 21-4A Part 2 2. Compute the predicted break-even point in dollar sales for year 2018 assuming the machine is installed and there is no change in the unit selling price. (Round your answers to 2 decimal places.) Contribution margin per unit Proposed Contribution Margin Ratio Choose Numerator: Choose Denominator: Contribution Margin Ratio Contribution margin ratio Break-even point in dollar sales with new machine: Choose Denominator: - Break-Even Point in Dollars Break-even point in dollars