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Waterway Company had sales in 2020 of $1,955,000 on 78,200 units. Variable costs totaled $1,173,000 and fixed costs totaled $547,000. A new raw material is
Waterway Company had sales in 2020 of $1,955,000 on 78,200 units. Variable costs totaled $1,173,000 and fixed costs totaled $547,000. 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 $115,000. Management feels that two-thirds of the decline in the variable costs per unit should be passed on to customers in the form of 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. (a1) Prepare a projected CVP income statement for 2020 assuming the changes have not been made. Attempts: 0 of 2 used (a2) Prepare a projected CVP income statement for 2020 assuming that changes are made as described
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