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Carey Company had sales in 2019 of $1,831,200 on 65,400 units. Variable costs totaled $1,046,400, and food costs totaled $450,000 A new raw material is
Carey Company had sales in 2019 of $1,831,200 on 65,400 units. Variable costs totaled $1,046,400, and food costs totaled $450,000 A new raw material is available that will decrease the variable costs per unit by 20% (or $3.20). However, to process the new raw material, foed operating costs will increase by $96,000. 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 (a) Prepare a projected CVP Income statement for 2020, assuming the changes have not been made. CAREY COMPANY CVP Income Statement Total Per Unit (b) Prepare a projected CVP income statement for 2020, 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.) CAREY COMPANY CVP Income Statement Total Per Unit
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