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A new raw material is available that will decrease the variable costs per unit by 20% (or $3.00 ). However, to process the new raw
A new raw material is available that will decrease the variable costs per unit by 20% (or $3.00 ). However, to process the new raw material, fixed operating costs will increase by $125,000. Management feels that two-thirds of the decline in the variable costs per unit 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 4% increase in the number of units sold. (a1) Prepare a projected CVP income statement for 2020 assuming the changes have not been made. (). Prepare a projected CVP income statement for 2020 assuming that changes are made as described. Swifty Company CVP Income Statement
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