Question

Riverside Inc, makes one model of wooden canoe. Partial information for it follows: 750 900 Number of Canoes Produced and Sold 550 Total costs Variable costs $ 104,500 Fixed costs 198,000 Total costs $302,500 Cost per unit Variable cost per unit $ 190.00 Fixed cost per unit 360.00 Total cost per unit $ 550.00 $142,500 198,000 $340,500 $171,000 198,000 $369,000 $ 190.00 264.00 $ 454.00 $ 190.00 220.00 $ 410.00 Riverside sells its canoes for $630 each. Next year Riverside expects to sell 1,000 canoes. Required: Complete the Riverside's contribution margin income statement for each independent scenario. Assuming each scenario is a variation of Riverside's original data. (Round your unit contribution margin and contribution margin ratio to 2 decimal places (.e.1234 should be entered as 12.34%) and all other answers to the nearest dollar amount.) Scenario 2 Increase

Answer 1

Scenario 1 Scenario 2 Scenario 3 Raises sales Increase prices to $ Selling price Decreases 730 Per and Variable fixed cost canoe cost by 10% by 20% 540.00 484.00 440.00 73.97% 69.84% 69.84% Unit Contribution Margin Contribution Margin ratio Contribution Margin Income Statement Sales Revenue 730000 693000 3 Variable cost 190000 209000 -7 Contribution Margin 540000 484000 Fixed cost 1980001 1980001 Net operating income 342000 286000 630000 190000 440000 158400 281600 Notes 730 190 693 209 6 1 30 90 Selling Price Variable Cost Contribution Margin (Selling Price - Variable cost) Fixed Cost Contribution Margin Ratio =( Contribution Margin/Sales) 5401 198000 484 198000 440 158400 73.97% 69.84% 69.84%