14 Required information The fowowing information appies to the questions display

Question

14 Required information The fowowing information appies to the questions displayed below Astro Co. sold 19,200 unts of its only product and incumed a $43,072 loss (gnoring taxes) for the current year as shown here. During a planning session for year 2018's activities, the production maneger notes that variable costs can be reduced 50% by instaling a machine that automates several operations To obtain these saving,the company must increase iRs annuel fixed costs by $142000. The maximum output capecity of the compeny is 40,000 units per year 10 salee 363 712 184 080 Conteibutloa argin Required 1. Compute the break-even point in doillar sales for year 2017 (Round your answers to 2 decimal places 0.00 on Margin Ratie Point in Dol lar Sales Prev 141516-18of20 Next >

Explanation / Answer

Break even point in dollar sales = Fixed cost / Contribution margin per unit

= 184,000 / 0.20 = 920,000

Required - 1 Contribution Margin Per Unit Current     Selling Price per Unit 36.7    Variable cost per Unit 29.36    Contribution margin per Unit 7.34

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