http://ezto mheducation.com/hm.tpx Logout successful-University om?Chapter 6 Hom

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http://ezto mheducation.com/hm.tpx Logout successful-University om?Chapter 6 Homework Chapter 6 Homework-Conn...x 166 points Sandy Bank Inc., makes one model of wooden canoe. And, the information for it follows Number of canoes produced and sold Total costs 700 850 Variable costs Fixed costs 92,500 $129.500 $157 250 $178 500 $178 500 $178 500 5271,000 $308000 $336,750 Total costs Cost per unit Variable cost per uni Fixed cost per unit Total cost per unit 185 00 18500 18500 357 00 25500 21000 542 00 440.00 395.00 Required: 1. Suppose that Sandy Bank raises its selling price to $500 per canoe Caloulate its new break-even point in units and in sales dollars (Do not roun New Break-Even Canoes Break Even Sales Revenue 2. it Sandy Bank sels 1,560 canoes, compufe ts margn of safety in dolars and as a percentage of sales. (Use the new sales price of $500.) (Roun Margin of Safety Percentage of Sales . Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $120,000 profit (Round your answer to the nearest whole

Explanation / Answer

a) Break even point units = 178500/(500-185) = 567 units

Break even point dollars = 567*500 = $283500

b) Margin of safety = 1560-567 = 993 units

Margin of safety sales = 993*500 = 496500

Margin of safety percentage = 496500*100/780000 = 63.65%

c) Required unit = (178500+120000)/315 = 948 units

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