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Sandy Bank, Inc., makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold 550 750 900 Total costs
Sandy Bank, Inc., makes one model of wooden canoe. Partial 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 $450 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. (Round your "Unit" answer to the nearest whole number. Round your intermediate calculations to whole dollars and percentages.) |
2. | If Sandy Bank sells 1,600 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.) |
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.) |
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