Sandy Bank, Inc., makes one model of wooden canoe. And, the information for it follows: Number of
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 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 |
Expert Answer:
Calculations for Sandy Bank Inc New BreakEven Point With a selling price of 500 per c... View the full answer
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
