Question

Sandy Bank, Inc., makes one model of wooden canoe. Partial information for it follows Required: 1. Complete the following table. (Round your "Cost per Unit" answers to 2 decimal places.) Number of Canoes Produced and Sold 450 620 720 Total costs 67,050 152,100 S 219,150 $ Variable Costs Fixed Costs Total Costs Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit 0.00$ 0.00 $ 0.00 2. Suppose Sandy Bank sells its cances for $560 each. Calculate the contribution margin per canoe and the contribution margin ratio. (Round your Intermediate calculations and final answers to 2 decimal places. Round your "percentage" answer to 2 decimal places. (i.e. .1234 should be entered as 12.34% Unit Contribution Margin Contribution Margin Ratio per Canoe

Answer 1

Ans-1-

Number of Canoes Produced and Sold	450	620	720
Total costs:
Variable Costs	$67,050	$92,380	$107,280
Fixed costs	$152,100	$152,100	$152,100
Total costs	$219,150	$244,480	$259,380
Cost per unit:
Variable cost per unit	$149	$149	$149
Fixed cost per unit	$338	$245.32	$211.25
Total cost per unit	$487	$394.32	$360.25

Variable cost per unit= Total Variable Costs/ Number of Units Sold

Fixed cost per unit= Total Fixed Costs . Number of Units Sold

2- Calculating contribution margin and contribution margin ratio:-

Selling price	$560	Per Canoe
Less: Variable cost	$149	Per Canoe
Contribution margin	$411	Per Canoe
Contribution margin ratio ($411/ $560*100)	73.39	%

3- SANDY BANK, Inc.

Contribution Margin Income Statement

For the Current Year

Sales (770 *$560)	$431,200
Less: Variable Cost (770* $149)	$114,730
Contribution Margin	$316,470
Less: Fixed Costs	$152,100
Income from Operations	$164,370

4- Breakeven point = Fixed Cost/ Contribution per unit

=$152,100/ $411

=370 units

Breakeven point in sales = Breakeven point in units * Sale price per unit

=370 units * $560

=$207,200

5- Sales in quantity to earn desired profit of $72,000:-

= Fixed Cost+ Desired Profit/ Contribution Margin Per Unit

= $152,100+$72,000/ $411

=545 units

Kindly give thumbsup if u like my answer....Thanks!!!