Carey Company had sales in 2019 of $1,806,000 on 64,500 units. Variable costs totaled $1,032,000, and...
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Carey Company had sales in 2019 of $1,806,000 on 64,500 units. Variable costs totaled $1,032,000, and fixed costs totaled $508,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $3.20). However, to process the new raw material, fixed operating costs will increase by $107,000. Management feels that one-half of the decline in the variable costs per unit should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold. (a) Prepare a projected CVP income statement for 2020, assuming the changes have not been made. CAREY COMPANY CVP Income Statement For the Year Ended December 31, 2020 Total Per Unit 2$ 2$ 2$ (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.) CAREY COMPANY CVP Income Statement Total Per Unit 24 2$ 2$ Carey Company had sales in 2019 of $1,806,000 on 64,500 units. Variable costs totaled $1,032,000, and fixed costs totaled $508,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $3.20). However, to process the new raw material, fixed operating costs will increase by $107,000. Management feels that one-half of the decline in the variable costs per unit should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold. (a) Prepare a projected CVP income statement for 2020, assuming the changes have not been made. CAREY COMPANY CVP Income Statement For the Year Ended December 31, 2020 Total Per Unit 2$ 2$ 2$ (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.) CAREY COMPANY CVP Income Statement Total Per Unit 24 2$ 2$
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a CVP Income statement assuming no changes have been made Carey ... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1119392422
8th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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