Oriole Company had sales in 2020 of $1,695,000 on 67,800 units. Variable costs totaled $1,017,000...
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Oriole Company had sales in 2020 of $1,695,000 on 67,800 units. Variable costs totaled $1,017,000 and froed costs totaled $452,000 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 $127,000. 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) Your answer is correct. Prepare a projected CVP income statement for 2020 assuming the changes have not been made Before Oriole Company had the chance to implement usage of the new raw material, new industry specifications were announced and result in the following changes for the Oriole Company. Variable costs will increase by 15% per unit and fored costs will increase by $53,000. Management feels that a $3 per unit price increase is needed to accommodate the cost increases. However. this will result in a 10% decrease in units sold. Prepare a CVP income statement assuming these changes have been made
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