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i Chrome File Edit View History Bookmarks People Window Help G 100% g Sat 2:40 PM Mitch Faylor E . MleyPLUS C Accounting question l Chegg/X Secure | https://edugen.wileyplus.com/edugen/student/mainfr.uni O custom Writing Ser Omni VR Treadmill. G CodeCombat Lear. The 7% Body Fat Di. :: Apps Illusions Continuous @ Old School RuneSc HubSpot Inbound E Companies Needing. WileyPLUS: MywileyPLUSIHep I Contact Us I Los ileyPLUS Weygandt, Financial & Hanagerial Accounting, a Financial and Managerial Accounting (ACCTG 10 Read, Study & Practice Gradebok ORION Downloadable eTextbook FULL SCREEN PRINTER VERSION BACKI Exercise 20-5 Carey Compary had sales in 2016 of $1,703,700 an G3,1C0 units Variatle costs totaled $893,A00, and fixed coss totaled $549,000. A ne re meter el eveilable that wil decreese the vaneble costs per unit by 20% or 52.80 However, to process the new ro mete el fixed operating costs will incre se by 590 0 0 Manager ent feels that one helf of the decline in the customers in the form of sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number oe units sold. (a) Prepare a projected CVP income statement fer 2017, assuming the changes have net been made (Round per unit cost to 2 decimal places, e.g. 5.25 and all other answers to O decimal places, e.g. 1,225.) er able costs per unit shoid bè passed on to CAREY COMPANY CVP Income Statement Total (b) Prepare a profected CVP income statement for 2017, assuming that changes are made as described. (Round per unit cost to 2 decimal places, e.g. 5.25 and aW other answers to O decimal pfaces, e.g. 1,225.) CAREY COMPANY All Rights Reserved. A Division of ichn Wley & Sc0s Ins

Explanation / Answer

a) CVP Income Statement Total per unit Sales 1,703,700 27 variable cost 883,400 14 Contribution income 820,300 13 less:Fixed cost 549,000 Net income 271,300 b) CVP Income Statement Total per unit Sales 1,696,128 25.6 variable cost 742,056 11.2 Contribution income 954,072 14.4 less:Fixed cost 639,000 Net income 315,072 sales price reduction = 2.8*1/2 1.4 units sold = 63100*105% 66255

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