Question

Riverside Inc. makes one model of wooden canoe. Partial information for it follows: 148,300 Number of Canoes Produced and sold 455 605 755 Total costs Variable costs $ 66,885 ? ? Fixed costs Total costs $215,185 ? ? Cost per unit Variable cost per unit ? Fixed cost per unit Total cost per unit ? 2 ? le cost per unit } www } TABLE FOR #1 ^ Required: 1. Complete the table. 3. Suppose Riverside sells its canoes for $502 each. Calculate the contribution margin per canoe and the contribution margin ratio. 4. Next year Riverside expects to sell 805 canoes. Complete the contribution margin income statement for the company. E E

Answer 1

455 605 755 1) Number of Canoes produced and sold Total costs :- Variable costs Fixed costs Total costs Cost per unit: Variable cost per unit Fixed cost per unit Total cost per unit 66,885 148,300 215,185 88,935 148,300 237,235 110,985 148,300 259,285 147.00 325.93 472.93 373.93 147.00 245.12 392.12 393,12 395:03 147.00 196.42 343.42 3) Contribution margin% and Contribution margin per canoe Particulars Contribution margin :- Sales Revenue (502*455) 228,410 Less: Variable cost (455*147) 66,885 Contribution margin 161,525 Contribution margin- Contribution margin (A) Sales Revenue (B) Contribution margin % (A/B) 161,525 228,410 70.72 Amounts 404,110 4) Contribution margin income statement : Particulars Sales Revenue (805*502) Less: Variable cost (805*147) Contribution margin Less: Fixed cost Net Operating Income 118,335 285,775 148,300 137,475