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Problem 5-3A (Static) Break-even analysis; income targeting and strategy LO C2, A1, P2 (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 savings, the company must increase its annual fixed costs by $241,000. The selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($50 per unit) $ 1,000,000 Variable costs ($40 per unit) B00.000 Contribution margin Pixed costs $ 25,000 200,000 175,000 Income Problem 5-3A (Static) Part 2 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. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 OTROS wwwa HUNNY MOULIN VUI LUI yenye 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 $241,000. The selling price per unit will not change. ASTRO COMPANY Contribution Margin Income statement For Year Unded December 31 Sales ($50 per unit) 5 1,000,000 Variable costs $40 per unit) 100,000 Contribution margin 200,000 Fixed costo 175,000 Income $ 25,000 13 Problem 5-3A (Static) Part 2 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 ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin

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