E6-6 Identifying Break-Even Point, Analyzing How Price Changes Affect Profitability; Calculating Margin of Safety, Target Profit [LO 6-1, 6-2, 6-3, 6-4]

E6-6 identifying Break Even Point, Analyzing How Price Changes Affect Profitability; Calculating Margin of Safety, Target Profit LO 6-1, 6-2, 6-3, 6-4] Sandy Bank, Inc., makes one model of wooden canoe. Partial information for it follows: 600 750 Number of canoes produced and sold 400 Total costs 67,500 101,250 126,563 Variable costs Fixed costs 150,000 50,000 50,000 Total costs 217.500 251.250 276.563 Cost per unit 168.75 168.75 68.75 Variable cost per unit Fixed cost per unit 375.00 250.00 200.00 Total cost per unit 543.75 418.75 368.75 Sandy Bank sells its canoes for $550 each. Required: 1. Suppose that Sandy Bank raises its selling price to $675 per canoe. Calculate its new break-even point in units and in sales dollars. (Round your answers to the nearest whole number.) New BreakEven Units Canoes Break-Even Sales Revenue 2. If Sandy Bank sells 650 canoes, compute its margin of safety in dollars and as a percentage of sales. Use the new sales price of $675.) (Round your answers to the nearest whole number. Margin of Safety Percentage of Sales 3. Calculate the number of canoes that Sandy Bank must sell at $675 each to generate $100.000 profit. (Round your answer to the nearest whole number.) Target Sales Units Canoes