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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 $ 112,750 $ 153,750 $ 184,500
Fixed costs $ 148,500 $ 148,500 $ 148,500
Total costs $ 261,250 $ 302,250 $ 333,000
Cost per unit
Variable cost per unit $ 205.00 $ 205.00 $ 205.00
Fixed cost per unit 270.00 198.00 165.00
Total cost per unit $ 475.00 $ 403.00 $ 370.00

Sandy Bank sells its canoes for $375 each.

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.

2. If Sandy Bank sells 1,600 canoes, compute its margin of safety in units and as a percentage of sales. (Use the new sales price of $500.)

3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $130,000 profit.

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