E6-5 Calculating Contribution Margin and Contribution Margin Ratio; Identifying Break-Even Point, Target Profit [LO 6-1, 6-2]

Sandy Bank, Inc., makes one model of wooden canoe. Partial information for it follows: Required: 1. Complete the following table. (Round your "Cost per Unit" answers to 2 decimal places.)

Number of Canoes Sold and Purchased	480	570	780
Total Cost
Variable Costs	$76,320
Fixed Costs	155,040
Total Costs	$231,360
Cost per unit
Variable Cost per unit
Fixed Cost per Unit
Total Cost per unit

2. Suppose Sandy Bank sells its canoes for $510 each. Calculate the contribution margin per canoe and the contribution margin ratio. (Round your intermediate calculations and final answers to 2 decimal places. Round your "percentage" answer to 2 decimal places. (i.e. .1234 should be entered as 12.34%.))

Unit Contribution Margin		per Canoe
Contribution Margin Ratio		%

3. This year Sandy Bank expects to sell 840 canoes. Prepare a contribution margin income statement for the company. (Round your intermediate calculations to 2 decimal places.)

Sandy Banks, Inc.

Contribution Margin Income Statement

For the current year

Contribution Margin
Income From Operations

4. Calculate Sandy Banks break-even point in units and in sales dollars. (Round final answers to the nearest whole number).

Break-even units		Canoes
Break-even sales revenue

5. Suppose Sandy Bank wants to earn $72,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. (Round Unit Contribution Margin to 2 decimal places. Round your answer to the next whole number.)

Target Sales Unit

Canoes