Hall company had sales in 2010 of 1500000 on 60000 units

Reference no: EM13606018

Hall Company had sales in 2010 of $1,500,000 on 60,000 units. Variable costs totaled $720,000, and fixed costs totaled $400,000.A new raw material is available that will decrease the variable costs per unit by 25% (or $3.00). However, to process the new raw material, fixed operating costs will increase by $150,000. 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.

Complete the CVP income statement for 2010, (a) assuming the changes have not been made and (b) assuming the changes are made as described. (For the per unit amounts round to 2 decimal places, e.g. 25.50. All other amounts round to 0 decimal places, e.g. 550,000.)

Reference no: EM13606018

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