Question

E5-19 (Algo) Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin Income Statement (LO 5-5] Riverside Inc. makes one model of wooden canoe. Partial information for it follows: 700 850 Number of Canoes Produced and Sold 500 Total costs Variable costs $ 92,500 Fixed costs 178,500 Total costs $271,000 Cost per unit Variable cost per unit $ 185.00 Fixed cost per unit 357.00 Total cost per unit $ 542.00 $129,500 178,500 $308,000 $157,250 178,500 $335, 750 $ 185.00 255.00 $ 440.00 $ 185.00 210.00 $395.00 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 2 decimal places (i.e. .1234 should be entered as 12.34%) and all other answers to the nearest dollar amount.) Scenario 1 Raises Sales Price to $750 per Canoe Scenario 2 Increase Scenario 3 Sales Price and Decrease Fixed Variable Cost per Unit by 10 Percent Cost by 20 Percent $ 511.50 $ 465.00 71.54 % | 71.54 % Unit Contribution Margins Contribution Margin Ratio 565.00 75.33 %

Answer 1

Scenario 1
	Selling price per unit			750
	Variable cost per unit			185
	contribution margin per unit			565
	contribution margin ratio			75.33%
	contibution/selling price per un
Scenario 2
	Selling price per unit			715
	Variable cost per unit			203.5
	contribution margin per unit			511.5
	contribution margin ratio			71.54%
	contibution/selling price per un
Scenario 3	Selling price per unit			650
	Variable cost per unit			185
	contribution margin per unit			465
	contribution margin ratio			71.54%
	contibution/selling price per un
			Scenario 1	Scenario 2	Scenario 3
unit contribution margin			565	511.5	465
contribution margin ratio			75.33%	71.54%	71.54%
contribution margin income statement
Sales			750000	715000	650000
less variable cost			185000	203500	185000
Contribution margin			565000	511500	465000
less fixed expense			178,500	178,500	142800
net income			386,500	333,000	322200