Riverside Inc. makes one model of wooden canoe. Partial information for it follo

Question

Riverside Inc. makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold Total costs 450 650 800 Varable costs Fixed costs $ 72,000 $ 104,000 $128,000 187 200 187,200 187 200 S259,200 S 291,200 S315,200 Total costs Cost per unit Variable cost per unit S 160.00 $ 160.00 S 160.00 234.00 448.00 S 394.00 Fixed cost per unit Total cost per unit S 576.00 Riverside sells its canoes for $680 each. Next year Riverside expects to sell 1,000 canoes. Required Complete the Riverside's contribution margin income statement for each independent scenario. Assuming each scenario is a variation of Riverside's original data. (Round your unit contribution margin and contribution margin ratio to two decimal places (i.e. .1234 should be entered as 12.34%) and all other answers to the nearest dollar amount.) Answer is complete but not entirely correct. Scenario 1 Ralses Sales Price to $780 per Canoe Sales Price and Variable Cost per Unit by 10 Scenario 3 Decrease Fixed Cost by 20 Percont 620.00 572 00 520.00 Contribution Margin Ratio 79.49 76.47 % 76.47 % 780,000 748,000 680,000 Sales Revenue Variable Costs 176,000 160,000 620,000 187,200 520,000 Contribution Margin Fixed Costs 572,000! 187.200 224,640 Net Operating Income 432.800 384.800 295,360

Explanation / Answer

Scenario 3 Decrease fixed cost by 20% Unit contribution margin 520 CM ratio 76.47% Sales revenue 680000 Variable costs 160000 Contribution margin 520000 Fixed costs 149760 =187200*(1-0.2) Net operating income 370240

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