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Sheridan Company had sales in 2022 of $1,606,500 on 59,500 units. Variable costs totalled $654,500, and fixed costs totalled $823,700. A new raw material is
Sheridan Company had sales in 2022 of $1,606,500 on 59,500 units. Variable costs totalled $654,500, and fixed costs totalled $823,700. A new raw material is available that will decrease the variable costs per unit by 20% (or $2.20). However, to process the new raw material, fixed operating costs will increase by $32,400. Management feel 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 10% increase in the number of units sold. Prepare a CVP income statement for 2022: (Round per unit cost to 2 decimal places, e.g. 15.25.) (a) Assuming the changes have not been made: SHERIDAN COMPANY CVP Income Statement (Unchanged) For the Year Ended December 31, 2022 Total Per Unit $ (b) Assuming that changes are made as described. SHERIDAN COMPANY CVP Income Statement (with changes) For the Year Ended December 31, 2022 Total Per Unit $ $
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