Question

400 600 750 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 $ 54,000 60,000 $114,000 $ 81,000 60,000 $ 141,000 $ 101,250 60,000 $ 161,250 $ 135.00 150.00 $ 285.00 $ 135.00 $ 135.00 100.00 80.00 $ 235.00 $ 215.00 Riverside sells its canoes for $370 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. margin ratio to two decimal places (ie. .1234 should be entered as 12.34%) and all other answers to the nearest dollar amount.) Scenario 1 Raises Sales Price to $470 per Canoe Scenario 2 Increase Sales Price and Variable Cost per Unit by 10 Percent Scenario 3 Decrease Fixed Cost by 20 Percent Unit Contribution Margin Contribution Margin Ratio 63.51% 63.51 % Contribution Margin Income Statement Sales Revenue Variable Costs Contribution Margin Fixed Costs Net Operating Income

Answer 1

Scenario 1 Scenario 2 Scenario 3 Raises sales Increase prices to $ Selling price Decreases 750 Per and Variable fixed cost by canoe cost by 10% 20% 335.00 258.50 235.00 71.28% 63.51% 63.51% Unit Contribution Margin Contribution Margin ratio Contribution Margin Income Statement Sales Revenue 470000 407000 Variable cost 135000 148500 Contribution Margin 335000 258500 Fixed cost 600001 60000 Net operating income 275000 198500 370000 135000 235000 48000 187000 407 3701 Selling Price Variable Cost Contribution Margin Fixed Cost Notes 470 135 335 60000 148.5 258.5 60000 135 235 48000