Question
Sandy Bank, Inc., makes one model of wooden canoe. and, the information for it follows: Number of canoes produced and sold 500 700 850 Total
Sandy Bank, Inc., makes one model of wooden canoe. and, the information for it follows:
Number of canoes produced and sold | 500 | 700 | 850 | ||||
Total costs | |||||||
Variable costs | $ | 90,000 | $ | 126,000 | $ | 153,000 | |
Fixed costs | $ | 119,000 | $ | 119,000 | $ | 119,000 | |
Total costs | $ | 209,000 | $ | 245,000 | $ | 272,000 | |
Cost per unit | |||||||
Variable cost per unit | $ | 180.00 | $ | 180.00 | $ | 180.00 | |
Fixed cost per unit | 238.00 | 170.00 | 140.00 | ||||
Total cost per unit | $ | 418.00 | $ | 350.00 | $ | 320.00 | |
Sandy Bank sells its canoes for $475 each.
Required:
1. Suppose that Sandy Bank raises its selling price to $600 per canoe. Calculate its new break-even point in units and in sales dollars.
2. If Sandy Bank sells 1,550 canoes, compute its margin of safety in units and as a percentage of sales. (Use the new sales price of $600.)
3. Calculate the number of canoes that Sandy Bank must sell at $600 each to generate $120,000 profit.
- Required 1
Suppose that Sandy Bank raises its selling price to $600 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.)
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- Required 2
If Sandy Bank sells 1,550 canoes, compute its margin of safety in units and as a percentage of sales. (Use the new sales price of $600.) (Round your answers to the nearest whole number.)
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required 3
Calculate the number of canoes that Sandy Bank must sell at $600 each to generate $120,000 profit. (Do not round your intermediate calculations. Round your answer to the nearest whole number.)
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