E6-5 Calculating Contribution Margin and Contribution MarginRatio; Identifying Break-Even Point, Target Profit [LO 6-1,6-2]
Sandy Bank, Inc., makes one model of wooden canoe. Partialinformation for it follows:
Required:
1. Complete the following table. (Round your "Costper Unit" answers to 2 decimal places.)
| Number of Canoes Sold and Purchased | 480 | 570 | 780 |
| Total Cost | | | |
| Variable Costs | $76,320 | | |
| Fixed Costs | 155,040 | | |
| Total Costs | $231,360 | | |
| Cost per unit | | | |
| Variable Cost per unit | | | |
| Fixed Cost per Unit | | | |
| Total Cost per unit | | | |
2. Suppose Sandy Bank sells its canoes for $510each. Calculate the contribution margin per canoe and thecontribution margin ratio. (Round your intermediatecalculations and final answers to 2 decimal places. Round your"percentage" answer to 2 decimal places. (i.e. .1234 should beentered as 12.34%.))
| Unit Contribution Margin | | per Canoe |
| Contribution Margin Ratio | | % |
3. This year Sandy Bank expects to sell 840canoes. Prepare a contribution margin income statement for thecompany. (Round your intermediate calculations to 2 decimalplaces.)
| Sandy Banks, Inc. |
| Contribution Margin Income Statement |
| For the current year |
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| Contribution Margin | |
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| Income From Operations | |
4. Calculate Sandy Bank’s break-even point inunits and in sales dollars. (Round final answers to thenearest whole number).
| Break-even units | | Canoes |
| Break-even sales revenue | | |
5. Suppose Sandy Bank wants to earn $72,000profit this year. Calculate the number of canoes that must be soldto achieve this target. (Round Unit Contribution Margin to2 decimal places. Round your answer to the next wholenumber.)
