Question

Saved Riverside Inc. makes one model of wooden canoe. Partial Information for it follows: Number of Canoes Produced and Sold 475 625 775 Total costs Variable costs $ 67,450 ? 2 Fixed costs 148,900 2 7 Total costs $216,350 2 ? Cost per unit Variable cost per unit 2 2 ? Fixed cost per unit 2 2 2 Total cost per unit 7 2 2 Required: 1. Complete the table. 3. Suppose Riverside sells its canoes for $519 each. Calculate the contribution margin per canoe and the contribution margin ratio. 4. Next year Riverside expects to sell 825 canoes. Complete the contribution margin income statement for the company. Complete this question by entering your answers in the tabs below. os Required 1 Required 3 Required 4 Complete the table. (Round your cost per unit answers to 2 decimal places.) 475 625 775 Number of Canoes Produced and Sold Total Costs Variable Costs Fixed Costs Total Costs $ 67.450 148,900 216,350 $ Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit

Answer 1

1)

number of canoes produced and sold	475	625	775
total cost
variable cost	67450	88750	110050
fixed cost	148900	148900	148900
total cost	216350	237650	258950
cost per unit
variable cost per unit	142	142	142
fixed cost per unit	313.47	238.24	192.13
total cost per unit	455.47	380.24	334.13

variable cost per unit=67450/475=142 per unit

this $142 will be same for different units produced.

fixed cost is $148900 and it will be same for different unit produced

variable cost for

625 units =625*142=88750

775 units=775*142=110050

total cost=fixed cost + variable cost

fixed cost per unit=fixed cost/units produced

for

475 units=148900/475=313.47

625 units=148900/625=238.24

775 units=148900/775=192.13

total cost per unit=variable cost per unit+fixed cost per unit

2)

contributiom margin per canoe=selling price-variable cost per unit

contributiom margin per canoe=519-142=377

contribution margin ratio=(contribution per canoe/selling price)*100

contribution margin ratio=(377/519)*100=72.64%

3) income statement of sales of 825 units canoes

	$
sales (825*$519)	428175
variable costs (825*$142)	117150
contribution	311025
fixed costs	148900
net income	162125

contribution= sales-variable costs=428175-117150=311025

net income=contribution-fixed cost=311025-148900=162125