Question

Sandy Bank, Inc., makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $520 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 830 canoes. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. 5. Suppose Sandy Bank wants to earn $73,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Complete the following table. (Round your "Cost per Unit" answers to 2 decimal places.) 420 570 7 60 Number of Canoes Produced and Sold Total costs Variable Costs Fixed Costs $ | 63,840 137,760 201,600 Total Costs $ Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit

Answer 1

1
Number of Canoes produced and sold	420	570	760
Total costs
Variable costs	63840	86640	115520
Fixed costs	137760	137760	137760
Total costs	201600	224400	253280
Cost per unit
Variable cost per unit	152.00	152.00	152.00
Fixed cost per unit	328.00	241.68	181.26
Total Cost per unit	480.00	393.68	333.26
2
Unit Contribution margin	368	per Canoe	=520-152
Contribution margin ratio	70.77%		=368/520
3
Contribution Margin Income Statement
Sales revenue	431600		=830*520
Variable costs	126160		=830*152
Contribution margin	305440
Fixed costs	137760
Income from Operations	167680
4
Break even units	374	Canoes	=137760/368
Break even Sales Revenue	194480	or 194659	=374*520
5
Target sales units	573	Canoes	=(137760+73000)/368