Question
Sandy Bank, Inc., makes one model of wooden canoe. And, the information for it follows: Number of canoes produced and sold 550 750 900 Total
Sandy Bank, Inc., makes one model of wooden canoe. And, the information for it follows:
Number of canoes produced and sold | 550 | 750 | 900 | ||||
Total costs | |||||||
Variable costs | $ | 110,000 | $ | 150,000 | $ | 180,000 | |
Fixed costs | $ | 99,000 | $ | 99,000 | $ | 99,000 | |
Total costs | $ | 209,000 | $ | 249,000 | $ | 279,000 | |
Cost per unit | |||||||
Variable cost per unit | $ | 200.00 | $ | 200.00 | $ | 200.00 | |
Fixed cost per unit | 180.00 | 132.00 | 110.00 | ||||
Total cost per unit | $ | 380.00 | $ | 332.00 | $ | 310.00 | |
|
Required: 1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. (Do not round intermediate calculations. Round your final answers to nearest whole number.)
New Break-Even Units | |
Break-Even Sales Revenue |
2. If Sandy Bank sells 1,590 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500.) (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 $500 each to generate $130,000 profit. (Round your answer to the nearest whole number.)
Target Sals Units | |
X | X |
X | X |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started