(CVP Analysis) Jacobean Creek Corporation has provided the following data for last year:
|
Sales |
5,000 units |
|
Sales price |
$80 per unit |
|
Variable cost |
$55 per unit |
|
Fixed cost |
$25,000 |
For the current year, Jacobean Creek believes that although sales volume will remain constant, the contribution margin per unit can be increased by 20% and total fixed cost can be reduced by 10%.
- Calculate the operating profit for last year and the current year.
- What is the increase in profit between the two years?