Booth Company had sales in 2020 of $1,715,000 on 68,600 units. Variable costs totaled $1,029,000 and fixed costs totaled $479,000. 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 $116,000. 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.

Prepare a projected CVP income statement for 2020 assuming the changes have not been made. Booth Company CVP Income Statement For the Year Ended December 31, 2020 Sales 1715000 Variable Costs 1029000 i Contribution Margin 686000 Less : Fixed Costs 479000 i Net Income/(Loss) $ 207000 (a2) Prepare a projected CVP income statement for 2020 assuming that changes are made as described. Booth Company CVP Income Statement V $ $