Sheffield Company had sales in 2020 of $1,865,000 on 74,600 units. Variable costs totaled $1,119,000 and fixed costs totaled $473,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $3.00). However, to process the new raw material, fixed operating costs will increase by $114,000. Management feels that two-thirds of the decline in the variable costs per unit should be passed on to customers in the form of sales price reduction. The marketing department expects that this sales price reduction will result in a 4% increase in the number of units sold. (a1) Your answer is correct. Prepare a projected CVP income statement for 2020 assuming the changes have not been made. Sales For the Year Ended December 31, 2020 1865000 Your answer is correct. Prepare a projected CVP income statement for 2020 assuming the changes have not been made. Sales Variable Costs For the Year Ended December 31, 2020 Contribution Margin 1865000 1119000 746000 Less Fixed Costs 473000 Net Income/(Loss) 273000 Prepare a projected CVP income statement for 2020 assuming that changes are made as described. Sales Variable Costs For the Year Ended December 31, 2020 Contribution Margin 1784432 931008 853424 Less Fixed Costs 587000 i Net Income/(Loss) 266424 Before Sheffield Company had the chance to implement usage of the new raw material, new industry specifications were announced and result in the following changes for the Sheffield Company. Variable costs will increase by 15% per unit and fixed costs will increase by $55,000. Management feels that a $3 per unit price increase is needed to accommodate the cost increases. However, this will result in a 10% decrease in units sold. Prepare a CVP income statement assuming these changes have been made. Sales For the Year Ended December 31, 2020 Variable Costs Contribution Margin 1879920 1081575. 798345 Less: Fixed Costs 528000 Net Income/(Loss) eTextbook and Medis 270345