Question

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Riverside Inc. makes one model of wooden canoe. Partial information for it follows Number of Canoes Produced and Sold 515 665 815 Total costs Variable costs $ 76,735 148.100 $224.835 Fixed costs Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit 7 2 2 Required: 1. Complete the table. (Round your cost per unit answers to 2 decimal places.) 665 815 Number of Canoes Produced and Sold 515 Total Costs S 76,735 Variable Costs 148,100 Fixed Costs 224.835 Total Costs Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit

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Answer 1

Answer 1

Requirement 1

Number of Canoes produced and sold	515	665	815
Total Costs
Variable Costs	$        76,735	$        99,085	$      121,435
Fixed costs	$      148,100	$      148,100	$      148,100
Total Costs	$      224,835	$      247,185	$      269,535
Cost per unit
Variable Costs per unit	$        149.00	$        149.00	$        149.00
Fixed costs per unit	$        287.57	$        222.71	$        181.72
Total Costs per unit	$        436.57	$        371.71	$        330.72

Requirement 2

Unit Contribution Margin	$        352.00
Contribution Margin Ratio	70	%

Requirement 3

Units	865
Sales	$      433,365
Less: Variable Cost	$      128,885
Contribution	$      304,480
Less: Fixed Cost	$      148,100
Net Operating Income	$      156,380

Explanation:

1. Variable Cost for 665 units = $ 76,735 / 515 * 665 = $ 99,085
2. Variable Cost for 815 units = $ 76,735 / 515 * 815= $ 121,435
3. Unit Contribution Margin = Sales - Variable Cost = $ 501 - $ 149 = $ 352
4. Contribution Margin Ratio = Unit Contribution Margin / selling price * 100 = 352 / 501 * 100 = 70 %

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