Required 3 : | |
Current | |
Sales per unit ( 1000000 / 20000 ) | 50 |
Variable cost per unit ( 800000 / 20000 ) | 40 |
Revised variable cost per unit = Current variable cost per unit * ( 1 - % reduction ) = 40 * ( 1 - 50% ) | 20 |
ASTRO COMPANY | |
Forecasted Contribution margin income statement | |
For year ended December 31, 2018 | |
Sales ( 50 * 20000 ) | 1000000 |
Variable cost ( 20 * 20000 ) | 400000 |
Contribution margin | 600000 |
Fixed costs ( 250000 + 200000 ) | 450000 |
Net income | 150000 |
Required 4 : | |
When machine is installed : | |
Contribution margin per unit = Contribution margin / Units sold = 600000 / 20000 | 30 |
Contribution margin ratio = Contribution margin per unit / Sales per unit = 30 / 50 | 60% |
Sales level required in dollars | ||||||
Choose numerator : | / | Choose denominator: | = | Sales dollars required | ||
Fixed costs plus pretax income | / | Contribution margin ratio | = | Sales dollars required | ||
650000 | / | 60% | = | 1083333 | ||
Sales level required in units | ||||||
Choose numerator : | / | Choose denominator: | = | Sales units required | ||
Fixed costs plus pretax income | / | Contribution margin ratio | = | Sales units required | ||
650000 | / | 30 | = | 21667 |
Required 5 : | ||
ASTRO COMPANY | ||
Forecasted Contribution margin income statement | ||
For year ended December 31, 2018 | ||
$ Per unit | $ | |
Sales | 50 | 1083333 |
Variable cost | 20 | 433333 |
Contribution margin | 30 | 650000 |
Fixed costs | 650000 | |
Net income | 0 |
Ch 18 Homework Required Information Problem 18-4A Break-even analysis; income targeting and forecasting LO C2, P2,...
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...
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...
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 19.300 units of its only product and incurred a $54 940 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...
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 20,600 units of its only product and incurred a $55,028 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018's activities, the production manager notes that varlable costs can be reduced 50 % by installing a machine that automates several operations. To obtain these savings, the company...
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 19,200 units of its only product and incurred a $43.072 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...
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 20,000 units of its only product and incurred a $50,000 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...
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...
Required information (Assessment Problem) 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 19,600 units of its only product and incurred a $46.568 loss (ignoring taxes) for the current year as shown here. During a plannin reduced 50% by nstal in a machine that automates several operations o obtain these savings. the company increase its annual fixed costs by $146.000. The maximum output capacity of...
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 19,300 units of its only product and incurred a $54.940 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...
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 20,300 units of its only product and incurred a $78,798 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...