Question

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

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

 Number of Canoes Produced and Sold 550 700 850 Total costs Variable costs \$ 73,150 ? ? Fixed costs 149,700 ? ? Total costs \$ 222,850 ? ? Cost per unit Variable cost per unit ? ? ? Fixed cost per unit ? ? ? Total cost per unit ? ? ?

Required:
1.
Complete the table. (Round your cost per unit answers to 2 decimal places.)

3. Suppose Riverside sells its canoes for \$507 each. Calculate the contribution margin per canoe and the contribution margin ratio. (Round your contribution margin to the nearest whole dollar and your contribution margin ratio to the nearest whole percent.)

4. Next year Riverside expects to sell 900 canoes. Complete the contribution margin income statement for the company.

#### Homework Answers

Answer #1
 Variable cost per unit 133 =73150/550 1 Number of Canoes Produced and Sold 550 700 850 Total costs Variable costs 73150 93100 113050 Fixed costs 149700 149700 149700 Total costs 222850 242800 262750 Cost per unit Variable cost per unit 133.00 133.00 133.00 Fixed cost per unit 272.18 213.86 176.12 Total cost per unit 405.18 346.86 309.12 3 Unit Contribution margin 374 =507-133 Contribution margin ratio 74% =374/507 4 Contribution margin income statement Sales revenue 456300 =900*507 Variable costs 119700 =900*133 Contribution margin 336600 Fixed costs 149700 Net Operating income 186900
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