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CURRENT DESIGNS Bill Johnson, sales manager, and Diane Buswell, controller at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the folowing production and operational costs necessary to produce one composite kayak Kevlar Resin and supplies Finishing kit (seat, rudder, ropes, etc.) Labor Selling and administrative expenses variable Selling and administrative expenses. fixed Manufacturing overhead - fixed $250 per kayak $100 per kayak $170 per kayak $420 per kayak $400 per kayak $119,700 per year $240,000 per year 4 8 Bill and Diane have asked you to provide a cost-volume-profit analysis to help them finalize the budget projections for 9 the upcoming year. Bilhas informed you that the seling price of the composite kayak will be $2,000. 1 Instructions 2 (a) Calculate variable cost per unit. 3 (b) Determine the unit contribution margin. 24(c) Using the unit contribution margin, determine the break-even point in units for this product line. 15 (d) Assume that Current Designs plans to earn $270,600 on this product line. Using the unit contribution 26 margin, calculate the number of units that need to be sold to achieve this goal 27 (0) Based on the most recent sales forecast, Current Design plans to sell 1,000 units of this model 28 Using your results from part (c), calculate the margin of safety and the margin of safety ratio. 29 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a

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