Business, 16.07.2019 03:20 giajramosp2r5da

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 variable costs can be reduced 50% by installing a machine that automates several operations. to obtain these savings, the company must increase its annual fixed costs by $156,000. the maximum output capacity of the company is 40,000 units per year. astro company contribution margin income statement for year ended december 31, 2017 sales $ 784,860 variable costs 627,888 contribution margin 156,972 fixed costs 212,000 net loss $ (55,028 ) prepare a forecasted contribution margin income statement for 2018 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.

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Astro co. sold 20,600 units of its only product and incurred a $55,028 loss (ignoring taxes) for the...

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