CVP-missing data; assumptions. You are analyzing the financial performance of Sonoma Winery based on limited data from a New York Times article. The article says that despite an increase in sales revenue from $4,704,000 in Year 8 to $4,725,000 in Year 9, Sonoma recently reported a decline in net income of $129,500 from Year 8 to an amount equal to 2 percent of sales revenue in Year 9. The average total cost per unit increased from $2.200 in Year 8 to $2.205 in Year 9.
a. Compute the changes, if any, in average selling price and sales in units from Year 8 to Year 9.
b. Can you compute the total fixed costs and variable cost per unit during Year 9? If so, do so. If not, illustrate why with a graph and discuss any important assumptions of the cost-volume-profit model that this application violates.