4. Cost-Volume-Profit Analysis Located in Glacier National Park, Many Glacier Hotel was built in 1915 by the Great Northern Railway. To supplement its lodging revenue, the hotel decided to begin manufacturing and selling small wooden canoes decorated with symbols hand painted by Native Americans living hear the park. The canoes were a great success, so a couple of years later the hotel began manufacturing and selling paddles. Many hotel guests purchase a canoe and paddles for use in self-guided tours of Swiftcurrent Lake. Because production of the two products began in different years, the canoes and paddles are produced in separate production facilities and employ different laborers. Each canoe sells for $540, and each paddle sells for $60. About 15 years ago, a fire destroyed the hotel's accounting records. A new system put into place before the next season provides the following aggregated data for the hotel's canoe and paddle manufacturing and marketing activities (Years 1 through 12 give the data for the years in which the new accounting system was active): Manufacturing Data Year Number of Canoes Manufactured Total Canoe Manufacturing Year Number of Costs Paddles Manufactured Total Paddle Manufacturing Costs 1 250 $103,000 1 900 $38,500 2 240 115,000 2 1,200 49,000 3 275 128,000 3 1,000 44,000 4 310 114,000 4 1,100 45,500 5 350 141,500 5 1,400 52,000 6 380 132,000 6 1,700 66,500 7 415 146,500 7 1,720 66,300 8 430 132,000 8 1,850 71,750 9 450 146,100 9 1,900 72,000 10 470 155,000 10 2,020 78,900 11 480 136,000 11 2,050 78,200 12 500 167,000 12 2,200 84,000 1. High-Low Cost Estimation Method a. Use the high-low method to estimate the per-unit variable costs and total fixed costs for the CANOE product line. b. Use the high-low method to estimate the per-unit variable costs and total fixed costs for the PADDLE product line. 2. Cost-Volume-Profit Analysis, Single-Product Setting a. Use CVP analysis to calculate the break-even points in units for the CANOE product line. b. Use CVP analysis to calculate the break-even points in units for the PADDLE product line. 3. Cost-Volume-Profit Analysis, Multiple-Product Setting The hotel's accounting system data show an average sales mix of approximately 300 canoes and 1,200 paddles each season. On top of the fixed costs for each product, there is an additional $28,000 of common fixed costs. Use CVP analysis to calculate the break-even points in units for both the canoe and paddle product lines combined. 4. Margin of Safety Calculate the hotel's margin of safety (both in units and in sales dollars) for Many Glacier Hotel, assuming the same facts as in Requirement 3, and assuming that it sells 650 canoes and 2,400 paddles next year