Your answer is partially correct.

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\mathrm{.}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$.15\mathrm{.}25.)$

$($a$)$ Assuming the changes have not been made:

SHERIDAN COMPANY

CVP Income Statement $($Unchanged$)$

$($b$)$ Assuming that changes are made as described.

SHERIDAN COMPANY

CVP Income Statement $($with changes$)$

For the Year Ended December $31,2022$