A new raw material is available that will decrease the variable costs per unit by 20% (or $2.00). However, to process the new raw material, fixed operating costs will increase by $41,700. 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 2020: (Round per unit cost to 2 decimal places, e.g. 15.25.) (a) Assuming the changes have not been made:

VOLMAR COMPANY CVP Income Statement (Unchanged) December 31, 2020For the Month Ended December 31, 2020For the Year Ended December 31, 2020
		Total		Per Unit
SalesVariable costsFixed costsOperating incomeContribution margin		$		$
SalesFixed costsContribution marginVariable costsOperating income
SalesContribution marginVariable costsOperating incomeFixed costs				$
SalesVariable costsFixed costsContribution marginOperating income
Operating incomeContribution marginFixed costsVariable costsSales		$

(b) Assuming that changes are made as described.

VOLMAR COMPANY CVP Income Statement (with changes) December 31, 2020For the Month Ended December 31, 2020For the Year Ended December 31, 2020
		Total		Per Unit
Fixed costsContribution marginVariable costsOperating incomeSales		$		$
Variable costsFixed costsOperating incomeSalesContribution margin
Fixed costsVariable costsContribution marginSalesOperating income				$
Contribution marginSalesVariable costsFixed costsOperating income
Contribution marginSalesOperating incomeFixed costsVariable costs		$

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