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Sandhill Company had sales in 2021 of $1,470,000 on 60,000 units. Variable costs totaled $882,000,...

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Accounting

Sandhill Company had sales in 2021 of $1,470,000 on 60,000 units. Variable costs totaled $882,000, and fixed costs totaled $490,000.
A new raw material is available that will decrease the unit variable costs by 20%(or $2.94). However, to process the new raw material,
fixed operating costs will increase by $98,000. Management feels that one half of the decline in the unit variable costs 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 2022, assuming the changes have not been made. (Round per unit cost to 2 decimal
places, e.g.5.25 and all other answers to 0 decimal places, e.g.1,225.)
SANDHILL COMPANY
CVP Income Statement
For the Year Ended December 31,2022
(b) Prepare a projected CVP income statement for 2022, assuming that changes are made as described. (Round per unit cost to 2 decimal
places, e.g.5.25 and all other answers to 0 decimal places, e.g.1,225.)
SANDHILL COMPANY
CVP Income Statement
December 31,2022
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