Sandy Bank, Inc., makes one model of wooden canoe. and, the information for it follows:

Number of canoes produced and sold		450		650		800
Total costs
Variable costs	$	63,000	$	91,000	$	112,000
Fixed costs	$	187,200	$	187,200	$	187,200
Total costs	$	250,200	$	278,200	$	299,200
Cost per unit
Variable cost per unit	$	140.00	$	140.00	$	140.00
Fixed cost per unit		416.00		288.00		234.00
Total cost per unit	$	556.00	$	428.00	$	374.00

Sandy Bank sells its canoes for $500 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.

New Break Even Units:

Break Even Sales Revenue:

2. If Sandy Bank sells 700 canoes, compute its margin of safety in units and as a percentage of sales. (Use the new sales price of $500.)

Margin of Safety:

Percentage of Sales:_____%

3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $110,000 profit.

Target Sales Units: