Required information(The following information applies to the questions displayed below]Astro Company sold 25,000 units of its only product and reported income of $117,600 for the current year. During aplanning session for next year's activities, the production manager notes that variable costs can be reduced 40% byinstalling a machine that automates several operations. To obtain these savings, the company must increase its annualfixed costs by $149,000. Total units sold and the selling price per unit will not change.ASTRO COMPANYContribution Margin Incone StatenentFor Year Ended December 31Sales ($40 per unit)$ 1,000,000800,000Variable costs ($32 per unit)Contribution marginFixed costs200,00082,400Incone$ 117,600ces2 Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assumesales are $1,000,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)ASTRO COMPANYContribution Margin Income StatementFor Year Ended December 31Contribution margin

New variable cost per unit = $32 x 60% = $19.2 New total fixed cost = $82,400 + $149,000 = $231,400…

Required information (The following information applies to the questions displayed below] Astro Company sold 25,000 units of its only product and reported income of $117,600 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 $149,000. Total units sold and the selling price per unit will not change. ASTRO COPANY Contribution Margin Incone Statenent For Year Ended Decenber 31 Sales (540 per unit) Variable costs ($32 per unit) Contribution margin Fixed costs $ 1,000,000 800,000 200,000 82,400 $ 117,600 Income 2 Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,000,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin

Required information (The following information applies to the questions displayed below] Astro Company sold 25,000 units of its only product and reported income of $117,600 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 $149,000. Total units sold and the selling price per unit will not change. ASTRO COPANY Contribution Margin Incone Statenent For Year Ended Decenber 31 Sales (540 per unit) Variable costs ($32 per unit) Contribution margin Fixed costs $ 1,000,000 800,000 200,000 82,400 $ 117,600 Income 2 Prepare a contribution margin income statement for next year that shows the expected results with the machine installed. Assume sales are $1,000,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 8P: The production of a new product required Zion Manufacturing Co. to lease additional plant...

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Bolger and Co. manufactures large gaskets for the turbine industry. Bolgers per-unit sales price and variable costs for the current year are as follows: Bolgers total fixed costs aggregate to 360,000. Bolgers labor agreement is expiring at the end of the year, and management is concerned about the effects of a new labor agreement on its break-even point in units. The controller performed a sensitivity analysis to ascertain the estimated effect of a 10-per-unit direct labor increase and a 10,000 reduction in fixed costs. Based on these data, the break-even point would: a. decrease by 1,000 units. b. decrease by 125 units. c. increase by 375 units. d. increase by 500 units.
The production of a new product required Zion Manufacturing Co. to lease additional plant facilities. Based on studies, the following data have been made available: Estimated annual sales24,000 units Selling expenses are expected to be 5% of sales, and net income is to amount to 2.00 per unit. Required: 1. Calculate the selling price per unit. (Hint: Let X equal the selling price and express selling expense as a percentage of X.) 2. Prepare an absorption costing income statement for the year ended December 31, 2016. 3. Calculate the break-even point expressed in dollars and in units, assuming that administrative expense and factory overhead are all fixed but other costs are fully variable.
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