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A and B , please and thank you Pharoah Company had sales in 2021 of $1,680,000 on 60,000 units. Variable costs totaled $1,008,000, and fixed
A and B , please and thank you Pharoah Company had sales in 2021 of $1,680,000 on 60,000 units. Variable costs totaled $1,008,000, and fixed costs totaled $560,000 A new raw material is available that will decrease the unit variable costs by 20% (or $3.36). However, to process the new raw materia fixed operating costs will increase by $112,000. Management feels that one half of the decline in the unit variable costs should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold. (a) Prepare a projected CVP Income statement for 2022, assuming the changes have not been made. (Round per unit cost to 2 decimal places, eg. 5.25 and all other answers to O decimal places, eg. 1,225.) PHAROAH COMPANY CVP Incoine Statement Total Per Unit Sales 1680000 $ 30 Variable Costs 1.008.000 18 Contribution Margin 672000 Fixed Costs 560,000 Net Income/tLoss) $ 112000 (b) Prepare a projected CVP income statement for 2022, assuming that changes are made as described. (Round per unit cost to 2 decimal places, eg. 5.25 and all other answers to decimal places, eg. 1,225.) PHAROAH COMPANY CVP Income Statement Total Per Unit Sales Variable Costs 13.8 Contribution Margin $ Fixed Costs Net Income/(Loss)
A and B , please and thank you
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