Oriole Company had sales in $2020$ of $$1,695,000$ on $67,800$ units. Variable costs totaled $$1,017,000$ and fixed costs totaled $$452,000.$

A new raw material is available that will decrease the variable costs per unit by $20\%($or $$3\mathrm{.}00).$ However, to process the new raw

material, fixed operating costs will increase by $$127,000.$ 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.

$($a$1)$

Your answer is correct.

Prepare a projected CVP income statement for $2020$ assuming the changes have not been made.

Oriole Company

CVP Income Statement

For the Year Ended December $31,2020$

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Attempts: $1$ of $5$ used

$($a$2)$

Your answer is partially correct.

Prepare a projected CVP income statement for $2020$ assuming that changes are made as described.

Oriole Company

CVP Income Statement

For the Year Ended December $31,2020$