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Question 4 Crane Company had sales in 2019 of $1,586,000 on 61,000 units. Variable costs totaled $854,000, and fixed costs totaled $450,000. A new raw
Question 4 Crane Company had sales in 2019 of $1,586,000 on 61,000 units. Variable costs totaled $854,000, and fixed costs totaled $450,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $2.80). However, to process the new raw material, fixed operating costs will increase by $90,000. Management feels 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 5% increase in the number of units sold. (a) Prepare a projected CVP income statement for 2020, assuming the changes have not been made. CRANE COMPANY CVP Income Statement Total Per Unit (b) Prepare a projected CVP income statement for 2020, assuming that changes are made as described. (Round per unit cost to 2 decimal places, e.g. 5.25 and all other answers to O decimal places, e.g. 1,225.) CRANE COMPANY CVP Income Statement Total Per Unit Click if you would like to Show Work for this question: Open Show Work
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