Sandy Bank, Inc., makes one model of wooden canoe. And, the
information for it follows:
Number of canoes produced and sold | 550 | 750 | 900 | ||||
Total costs | |||||||
Variable costs | $ | 110,000 | $ | 150,000 | $ | 180,000 | |
Fixed costs | $ | 99,000 | $ | 99,000 | $ | 99,000 | |
Total costs | $ | 209,000 | $ | 249,000 | $ | 279,000 | |
Cost per unit | |||||||
Variable cost per unit | $ | 200.00 | $ | 200.00 | $ | 200.00 | |
Fixed cost per unit | 180.00 | 132.00 | 110.00 | ||||
Total cost per unit | $ | 380.00 | $ | 332.00 | $ | 310.00 | |
Required:
1. Suppose that Sandy Bank raises its selling price to
$500 per canoe. Calculate its new break-even point in units and in
sales dollars. (Do not round intermediate calculations.
Round your final answers to nearest whole number.)
New Break-Even Units | |
Break-Even Sales Revenue |
2. If Sandy Bank sells 1,590 canoes, compute its
margin of safety in dollars and as a percentage of sales. (Use the
new sales price of $500.) (Round your answers to the
nearest whole number.)
Margin of safety | |
Percentage of Sales |
3. Calculate the number of canoes that Sandy Bank
must sell at $500 each to generate $130,000 profit. (Round
your answer to the nearest whole number.)
Target Sals Units | |
X | X |
X | X |
2) New break even point = 99000/(500-200) = 330 Units
Break even sales revenue = 330*500 = $165000
3) Margin of safety = (1590-330)*500 = $630000
Margin of safety percentage = 1590-330/1590 = 79%
4) Target sales unit = (130000+99000)/300 = 763 Units
Sandy Bank, Inc., makes one model of wooden canoe. And, the information for it follows: Number...
Sandy Bank, Inc., makes one model of wooden canoe. And, the information for it follows: 600 800 950 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 $129.000 $228.000 $357.000 $172.000 $228.000 $400,000 $204,250 $228.000 $432.250 $ 215.00 380.00 $ 595.00 $ 215.00 285.00 $ 500.00 $ 215.00 240.00 $ 455.00 Required: 1. Suppose that Sandy Bank raises its selling...
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Sandy Bank, Inc., makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $580 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 750 canoes. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank’s break-even point in units and in sales dollars. 5. Suppose Sandy Bank wants to earn $65,000...
Sandy Bank, Inc., makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $520 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 830 canoes. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. 5. Suppose Sandy Bank wants to earn $73,000...
Sandy Bank, Inc., makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $530 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 810 canoes. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. 5. Suppose Sandy Bank wants to earn $84,000...
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