Vaughn company had sales in 2020 of 1975000on 79000 units variable costs totaled 1185000 and fixed costs totaled 508000. 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 $114000. 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

Vaughn Company CVP Income Statement $ $