Question

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Sandy Bank, Inc., makes one model of wooden canoe. Partial information is given below. points Required: 1. Complete the following table 2. Suppose Sandy Bank sells its Canoes for $550 each. Calculate the contribution margin per cance and the contribution margin ratio. 3. This year Sandy Bank expects to sell 750 cances, Prepare a contribution margin income statement for the company 4. Calcune Sandy Bank's break even point in units and in sales dollars 5. Suppose Sandy Bank wants to earn $82,000 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 Cance Produced and sold 70.000 Variable Costs Fixed Costs Total Costs 1500 Coster Unit Variable Cost per Unit Fund Cost per unit Total Cost per unit

Answer 1

1)Variable cost varies with number of units produced and sold .Thus it remains constant in per unit and varies in totality

Fixed cost remains constant and does not varies with output .Thus it remains constant in totality and varies in per unit

Number of canoes produced and sold	480	550	800
Total cost
Variable cost	70080	550*146= 80300	800*146= 116800
Fixed cost	159840	159840	159840
Total cost	229920	240140	276640
cost per unit
variable cost per unit	70080/480= 146	146	146
Fixed cost per unit	159840/480= 333	159840/550= 290.62	159840/800= 199.8
Total cost per unit	479	436.62	345.8

2)

Unit contribution margin = sales price -variable cost per unit

                       = 550-146

                      = 404

Contribution margin ratio = unit contribution /sales price

                         = 404 /550

                          = .7345 or 73.45%

3)

SANDY BANK INC Contribution margin income statement for the year ended
sales (550*750)	412500
Variable expense (146*750)	109500
contribution margin	303000
Fixed cost	159840
Net income	143160

4)

Breakeven point (units) =Fixed cost '/unit contribution margin

                 = 159840 /404

                      = 395.64 units (rounded to 396)

Breakeven point ($) = Fixed cost /contribution margin ratio

                   = 159840 /.7345

                   =$ 217617

5)Target unit sales =[Fixed cost+ target profit ]/unit contribution margin

                     = [159840 +82000]/404

                       = 241840/404

                       = 599 units