Pharoah Company had sales in $2024$ of $$1,350,000$ on $60,000$ units. Variable costs totaled $$810,000,$ and fixed costs totaled

$$450,000.$

A new raw material is available that will decrease the unit variable costs by $20\%($or $$2\mathrm{.}70).$ However, to process the new raterial

fixed operating costs will increase by $$90,000.$ Management feels that one half of the decline 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 $2025,$ assuming the changes have not been made. $($Round per unit cost to $2$ decimal

places, e$.$g$.5\mathrm{.}25$ and all other answers to $0$ decimal places, e$.$g$.1,225.)$

PHAROAH COMPANY

CVP Income Statement

For the Year Ended December $31,2025$

Total

$

Net Income$/($Loss$)$

Per Unit

$

$

$

$

$($b$)$ Prepare a projected CVP income statement for $2025,$ assuming that changes are made as described. $($Round per unit cost to $2$ decimal

places, e$.$g$.5\mathrm{.}25$ and all other answers to $0$ decimal places, e$.$g$.1,225.)$

PHAROAH COMPANY

CVP Income Statement

Total

$

Per Unit

$

$

$