Booth Company had sales in of $ on units. Variable costs totaled $ and fixed costs totaled $
A new raw material is available that will decrease the variable costs per unit by or $ However, to process the new
material, fixed operating costs will increase by $ Management feels that twothirds 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 increase in the number of units sold.Before Booth 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 Booth Company. Variable costs will increase by per unit and fixed costs will
increase by $ Management feels that a $ per unit price increase is needed to accommodate the cost increases. However,
this will result in a decrease in units sold. Prepare a CVP income statement assuming these changes have been made.
Booth Company
CVP Income Statement
For the Year Ended December
$
Net IncomeLoss
$
