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Wildhorse Company had sales in 2022 of $1,773,000 on 59,100 units. Variable costs totalled $591,000, and fixed costs totalled $1,015,600. 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 $49,900. 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 2022: (Round per unit cost to 2 decimal places, e.g. 15.25.) .... ages have not been mader

Wildhorse Company had sales in 2022 of $1,773,000 on 59,100 units. Variable costs totalled $591,000, and fixed costs totalled $1,015,600. 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 $49,900. 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 2022: (Round per unit cost to 2 decimal places, e.g. 15.25.) .... ages have not been mader

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Wildhorse Company had sales in 2022 of $1,773,000 on 59,100 units. Variable costs totalled $591,000, and fixed costs totalled $1,015,600. 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 $49,900. 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 2022: (Round per unit cost to 2 decimal places, e.g. 15.25.) (a) Assuming the changes have not been made: Sales Variable costs Contribution margin Fixed costs Operating income Sales Variable costs Contribution margin (b) Assuming that changes are made as described. Fixed costs WILDHORSE COMPANY CVP Income Statement (Unchanged) For the Year Ended December 31, 2022 Operating income $ $ Total $ $ 1773000 Total 591000 1182000 1015600 166400 WILDHORSE COMPANY CVP Income Statement (with changes) For the Year Ended December 31, 2022 $ $ $ $ Per Unit Per Unit 30 10.00 20.00
Transcribed Image Text:Wildhorse Company had sales in 2022 of $1,773,000 on 59,100 units. Variable costs totalled $591,000, and fixed costs totalled $1,015,600. 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 $49,900. 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 2022: (Round per unit cost to 2 decimal places, e.g. 15.25.) (a) Assuming the changes have not been made: Sales Variable costs Contribution margin Fixed costs Operating income Sales Variable costs Contribution margin (b) Assuming that changes are made as described. Fixed costs WILDHORSE COMPANY CVP Income Statement (Unchanged) For the Year Ended December 31, 2022 Operating income $ $ Total $ $ 1773000 Total 591000 1182000 1015600 166400 WILDHORSE COMPANY CVP Income Statement (with changes) For the Year Ended December 31, 2022 $ $ $ $ Per Unit Per Unit 30 10.00 20.00
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