Carey Company had sales in 2016 of $1,684,800 on 62,400 units. Variable costs totaled $1,123,200, and fixed costs totaled $513,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $3.60). However, to process the new raw material, fixed operating costs will increase by $92,000. Management feels that one-half 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 5% increase in the number of units sold.

(b) Prepare a projected CVP income statement for 2017, assuming that changes are made as described. (Round per unit cost to 2 decimal places, e.g. 5.25 and all other answers to O decimal places, e.g. 1,225.) CAREY COMPANY CVP Income Statement For the Year Ended December 31, 2017 | Total Per Unit Sales 1,670,760 25.5 Variable Costs 943,488 i 14.40 i Contribution Margin 727,272 11.1 Fixed Costs H D 605,000 i Net Income/(Loss) 122,272