Question

Riverside Inc. makes one model of wooden canoe. Partial information for it follows:

Number of Canoes Produced and Sold		550			750			900
Total costs
Variable costs	$	115,500		$	157,500		$	189,000
Fixed costs		198,000			198,000			198,000
Total costs	$	313,500		$	355,500		$	387,000
Cost per unit
Variable cost per unit	$	210.00		$	210.00		$	210.00
Fixed cost per unit		360.00			264.00			220.00
Total cost per unit	$	570.00		$	474.00		$	430.00

Riverside sells its canoes for $650 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 two decimal places (i.e. .1234 should be entered as 12.34%) and all other answers to the nearest dollar amount.)

Answer 1

Number of canoes produced & sold	550	750	900	1000
sales @ 650	357500	487500	585000	650000
less: variable cost @210	115500	157500	189000	210000
Contribution margin	242000	330000	396000	440000
less: fixed cost	198000	198000	198000	198000
net operating income	44000	132000	198000	242000

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