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 $530 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 810 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 $84,000 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.) Number of Canoes Produced and Sold 500 5 80 7 00 Total costs Variable Costs $ 74,0007 Fixed Costs 169,500 169,500 169,500 Total Costs $ 243,500 $ 169,500 $ 169,500 Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit $ 0.00 $ 0.00 $ < Required 1 Required 2 >

Answer 1

	Number of Canoes produced and sold				500	580	700
	total costs
	variable costs				74,000	98600	119000
	fixed costs				169,500	169,500	169,500
	total costs				243,500	268100	288500
	cost per unit
	variable cost per unit				170.00	170.00	170.00
	fixed cost per unit				339.00	292.24	242.14
	total cost per unit				509.00	462.24	412.14
2)	unit contribution margin			(530-170)		360	per canoe
	contribution margin ratio			(360/530)		67.92%
3)		contribution margin income statement
	sales		(810*530)			429300
	less variable expense (840*149)		(810*170)			137700
	Contribution margin					291600
	less fixed expense					169,500
	Net income					122,100
4)	Break even units					471	canoes
	break even sales revenue					249630
	BEP(units) = fixed cost/contribution margin per unit
		169500/360
	BEP(sales) = 471*530
		249630
5)	Target sale units					704	canoes
	(169500+84000)/360
	704.1667