Question

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 $550 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 $81,000 profit this year. Calculate the number of canoes that must be sold to achieve this target.

• Required 1

Complete the following table. (Round your "Cost per Unit" answers to 2 decimal places.)

Number of Canoes Produced and Sold	400	620	720
Total costs
Variable Costs	$60,400
Fixed Costs	135,200
Total Costs	$195,600
Cost per Unit
Variable Cost per Unit
Fixed Cost per Unit
Total Cost per Unit

Unit Contribution Margin		per Canoe
Contribution Margin Ratio		%

SANDY BANK, Inc.
Contribution Margin Income Statement
For the Current Year
Contribution Margin
Income from Operations

This year Sandy Bank expects to sell 830 canoes. Prepare a contribution margin income statement for the company. (Round your intermediate calculations to 2 decimal places.)

Break-Even Units		Canoes
Break-Even Sales Revenue

Calculate Sandy Bank’s break-even point in units and in sales dollars. (Round final answers to the nearest whole number.)

• Required 2
• its canoes for $550 each. Calculate the contribution margin per canoe and the contribution margin ratio. (Round your intermediate calculations and final answers to 2 decimal places. Round your "percentage" answer to 2 decimal places. (i.e. .1234 should be entered as 12.34%.))
• Required 3
• Required 4
• Required 5

Suppose Sandy Bank wants to earn $81,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. (Round Unit Contribution Margin to 2 decimal places. Round your answer to the next whole number.)

Target Sales Units

Canoes

Answer 1