Reference no: EM133006444

Astro Company sold 21,000 units of its only product and reported income of $84,800 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 48% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $152,000. Total units sold and the selling price per unit will not change.

ASTRO COMPANY
Contribution Margin Income Statement
For Year Ended December 31

Sales ($52 per unit) $ 1,092,000
Variable costs ($44 per unit) 924,000
Contribution margin 168,000
Fixed costs 83,200
Income $ 84,800

Problem 1: Compute the break-even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.)