Question

Riverside Inc. makes one model of wooden canoe. Partial information for it follows:

Number of Canoes Produced and Sold
		490		640		790
Total costs
Variable costs	$	67,620		?		?
Fixed costs		149,600		?		?
Total costs	$	217,220		?		?
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 $503 each. Calculate the contribution margin per canoe and the contribution margin ratio.

4. Next year Riverside expects to sell 840 canoes. Complete the contribution margin income statement for the company.

Complete the table. (Round your cost per unit answers to 2 decimal places.)

	Number of Canoes Produced and Sold 490 640 790 Total Costs Variable Costs $67,620 Fixed Costs 149,600 149,600 149,600 Total Costs $217,220 $227,220 $149,600 Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit $0.00 $0.00 $0.00

2.

Unit Contribution Margin not attempted per canoe Contribution Margin Ratio not attempted %

3.

Next year Riverside expects to sell 840 canoes. Complete the contribution margin income statement for the company. (Round your Contribution margin to 2 decimal places.)

	RIVERSIDE INC. Contribution Margin Income Statement For the Next Year not attempted not attempted not attempted not attempted Contribution Margin not attempted Net Operating Income

Answer 1

1

Number of Canoes Produced and Sold	490	640	790
Total Costs
Variable Costs	$67,620	88,320	109,020
Fixed Costs	149,600	149,600	149,600
Total Costs	$217,220	$237,920	$258,620
Cost per Unit
Variable Cost per Unit	138	138	138
Fixed Cost per Unit	305.31	233.75	189.37
Total Cost per Unit	$443.31	$371.75	$327.37

2

Unit Contribution Margin	$ 365	per canoe
Contribution Margin Ratio	72.56	%

3

Sales revenue (840 * 503)	422,520
Variable costs (840 * 138)	115,920
Contribution margin (840 / 365)	306,600
Fixed costs	149,600
Net operating income	157,000