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 Produced and Sold	420	610	730
Total costs
Variable Costs	$61,740
Fixed Costs	142,380
Total Costs	$204,120
Cost per Unit
Variable Cost per Unit
Fixed Cost per Unit
Total Cost per Unit

2. Suppose Sandy Bank sells its canoes for $500 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 800 canoes. Prepare a contribution margin income statement for the company. (Round your intermediate calculations to 2 decimal places.)

SANDY BANK, 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 $78,000 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 Units

Canoes