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Crane Company had sales in 2021 of $1,560,000 on 60,000 units. Variable costs totaled $936,000, and fixed costs totaled $520,000. A new raw material is
Crane Company had sales in 2021 of $1,560,000 on 60,000 units. Variable costs totaled $936,000, and fixed costs totaled $520,000. A new raw material is available that will decrease the unit variable costs by 20% (or $3.12 ). However, to process the new raw material, fixed operating costs will increase by $104,000. Management feels that one half of the decine in the unit variable costs 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 2022, assuming the changes have not been made. (Round par upitcoskh 2 d ce 2in ? (b) Prepare a projected CVP income statement for 2022, assuming that changes are made as described. (2ound ficerunit coutz 20 2gecinat) CRANE COMPANY cVp Income statement
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