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 545 5 76,845 5225,945 695 845 Total costs Variable costs Fixed costs 149.100 - Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Required: 1. Complete the table. (Round your cost per unit answers to 2 decimal places.) Number of Canoes Produced and Sold 545 695 845 Total Costs 76,845 149.100 S 225.945 Variable Costs Fixed Costs Total Costs Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit 3. Suppose Riverside sells its canoes for $515 each. Calculate the contribution margin per canoe and the contribution margin ratio. (Round your contribution margin to the nearest whole dollar and your contribution margin ratio to the nearest whole percent.) Unit Contribution Margin Contribution Margin Ratio 4. Next year Riverside expects to sell 895 canoes. Complete the contribution margin income statement for the company. RIVERSIDE INC. Contribution Margin Income Statement For the Next Year Contribution Margin Net Operating Income

Explanation / Answer

1 Number of can0es produced and sold Working 545 Working 695 Working 845 Total costs: Total variable cost 76845 695*141 97995 845*141 119145 Total fixed costs 149100 149100 149100 Total costs 225945 97995+149100 247095 119145+149100 268245 Cost per unit: Variable cost per unit 76845/545                     141.00 97995/695 141.00 119145/845 141.00 Fixed cost per unit 149100/545                   273.58 149100/695 214.53 149100/845 176.45 total cost per unit 225945/545 414.58 247095/695 355.53 268245/845 317.45 Total Fixed cost always remains same irrespective of number of units. 3) Calculation of unit contribution margin and contribution margin ratio Particulars Amount Selling price per unit 515 Less:Variable cost per unit 141 Unit Contribution margin(515-141) 374 Contribution margin ratio= unit contribution margin/ selling price per unit*100                                                    = 374/515*100= 72.62% Cotribution margin ratio= 73% Unit contribution margin= $374 4) Contribution margin Income statement:                                                        RIVERSIDE INC                                    Contribution Margin Income Statement                                            For the next year Particulars Amount(in $) Sales( 895 canoes*515) 460925 Less: Variable cost( 895 canoes* 141) 126195 Contribution margin 334730 (460925-126195) Less: Fixed cost 149100 Net operating Income 185630 (334730-149100) Net operating Income= $185630

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