Question

Riverside inc. makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold 475 625 775 ? $ 63,650 148,700 $212,350 ? ? ? ? Total costs Variable costs Fixed costs Total costs 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 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. Required 1 Required 3 Required 4 Complete the table. (Round your cost per unit answers to 2 decimal places.)

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Answer 1

1 475 625 775 $ Add Canoes Produced & Sold Total Cost: Variable cost Fixed cost Total Cost Cost per unit: Variable cost per unit Fixed cost per unit Total Cost per unit $ $ $ 63,650 $ 148,700$ 212,350 $ 83,750 $ 148,700$ 232,450 $ 103,850 148,700 252,550 $ 134.00 Add $ $ $ 134.00 $ 313.05$ 447.05$ 134.00 $ 237.92 $ 371.92 $ 191.87 325.87 Variable cost per unit = 63650 / 475 =134 per unit Variable cost per unit remains same through out production level unless any changes are made. Total variable cost = number of units x variable cost per unit = 625 x 134 = 83750, 775 x 134 = 103850 Total fixed cost will remain for all level of activity within relevant range. Fixed cost per unit = total fixed cost / number of units = 148700/475 = 313.05, 148700/625 = 237.92, 148700/775 = 191.87 3 Less Sales Revenue Variable Cost Contribution Margin $ $ $ 518.00 134.00 calculated above 384.00 per canoe 384.00 Contribution Margin Sales Revenue Contribution Margin Ratio $ $ Divide 518.00 74.13% Contribution margin = Sales - Variable cost Contribution margin ratio = contibution margin / sales revenue x 100 4 Contribution Margin Income Statement Less Sales Revenue Variable Cost Contribution Margin Fixed Cost Income from operation $ $ $ $ $ 427,350 (825 x 518) 110,550 (825 x 134) 316,800 148,700 will remain same. 168,100 Less