(Solved):     Sheridan Company had sales in 2022 of \( \$ 1,457,500 \) on 58,300 units. Variabl ...

 

 

Sheridan Company had sales in 2022 of \( \$ 1,457,500 \) on 58,300 units. Variable costs totalled \( \$ 583,000 \), and fixed costs totalled \( \$ 730,300 \). 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 \( \$ 45,000 \). 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: (b) Assuming that changes are made as described.