Question

Riverside Inc. makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold 495645795 Total costs Variable costs $ 67, 320 ? Fixed costs 148, 400 _ ? Total costs $215,720 Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Required: 1. Complete the table. 3. Suppose Riverside sells its canoes for $518 each. Calculate the contribution margin per canoe and the contribution margin ratio. 4. Next year Riverside expects to sell 845 canoes. Complete the contribution margin income statement for the company.

Answer 1

1
Number of Canoes produced and sold	495	645	795
Total costs
Variable costs	67320	87720	108120
Fixed costs	148400	148400	148400
Total costs	215720	236120	256520
Cost per unit
Variable cost per unit	136.00	136.00	136.00
Fixed cost per unit	299.80	230.08	186.67
Total Cost per unit	435.80	366.08	322.67
3
Unit contribution margin	382	per canoe	=518-136
Contribution margin ratio	74%		=382/518
4
Contribution Margin Income Statement
Sales revenue	437710	=845*518
Variable costs	114920	=845*136
Contribution Margin	322790
Fixed costs	148400
Net Operating income	174390