70.2K

Verified Solution

Link Copied!

3 Part 3 of 3 Required information Problem 18-4A Break-even analysis; income targeting and forecasting LO C2, P2, A1 [The following information applies to the questions displayed below.] Astro Co. sold 19,700 units of its only product and incurred a $59,290 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020'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 $147,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales $732,840 Variable costs 549,630 Contribution margin 183,210 Fixed costs Net loss $(59,290) 3 points 242,500 Problem 18-4A Part 3 3. Prepare a forecasted contribution margin income statement for 2020 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ASTRO COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 S HHH Neyt variable COSTS Contribution margin Fixed costs Net loss 349,00 183, 210 242,500 $(59,290) 3 rt 3 of 3 Problem 18-4A Part 3 3. Prepare a forecasted contribution margin income statement for 2020 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) ts ASTRO COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Contribution margin

Answer & Explanation Solved by verified expert

See Answer