Carey Company had sales in 2019 of $1,766,800 on 63,100 units. Variable costs totaled $1,009,600, and fixed costs totaled $499,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $3.20). 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 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 5% increase in the number of units sold. A) Prepare a projected CVP income statement for 2020, assuming the changes have not been made. B) Prepare a projected CVP income statement for 2020, assuming that changes are made. Carey Company CVP Income Statement Total Per Unit $ $

sales revenue 66,255 x $26.4  =  1.749.132‬

variable cost:  66,255 x $12.80 = (848.064‬)  

contribution margin                        901.068‬

fixed cost:                                       (597,000)

projected income                           304.068‬

Explanation:

variable cost per unit:

1,009,600 / 6,300 = 16

the varaible cost decrease 20% which is 3.20

new variable cost: 12.80

fixed cost increase by 98,000 to 597,000 from 499,000

sales:

1,766,800 / 63100 = 28

half the savings move to consumer:

28 - 3.2/2 = 26.4

63,100 x 1.05 = 66,255‬

sales revenue 66,255 x $26.4  =  1.749.132‬

variable cost:  66,255 x $12.80 = (848.064‬)  

contribution margin                        901.068‬

fixed cost:                                       (597,000)

projected income                           304.068‬

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.