Booth Company had sales in 2020 of $1,780,000 on 71,200 units. Variable costs totaled $1,068,000 and...

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Booth Company had sales in 2020 of $1,780,000 on 71,200 units. Variable costs totaled $1,068,000 and fixed costs totaled $549,000 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 $132,000. 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) Your answer is correct. 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 Variable Costs Contribution Margin 1780000 1068000 1 12000 Le Find Costs 549000 1 Net income/LON 163000 Booth Company had sales in 2020 of $1,780,000 on 71,200 units. Variable costs totaled $1,068,000 and fixed costs totaled $549,000 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 $132,000. 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) Your answer is correct. 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 Variable Costs Contribution Margin 1780000 1068000 1 12000 Le Find Costs 549000 1 Net income/LON 163000