Question

Riverside Inc. makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold 500 650 800 Total costs Variable costs $ 66,500 ? ? Fixed costs 148,500 ? ? Total costs $ 215,000 ? ? 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 500 650 800 Total Costs Variable Costs $66,500 Fixed Costs 148,500 Total Costs $215,000 $0 $0 Cost per Unit Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit $0.00 $0.00 $0.00

3. Suppose Riverside sells its canoes for $503 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 850 canoes. Complete the contribution margin income statement for the company. With discription

	RIVERSIDE INC. Contribution Margin Income Statement For the Next Year Contribution Margin Net Operating Income

Answer 1

Answer:-2)-

Number of Canoes Produced & Sold	500	650	800
Total costs
Variable costs $	66500	650 canoes*$133 per unit=86450	800 canoes*$133 per unit=106400
Fixed costs $	148500	650 canoes*$228.46 per unit=148500	800 canoes*$185.63 per unit=148500
Total costs	215000	234950	254900
Cost per unit
Variable Cost per unit	133	133	133
Fixed Cost per unit	297	228.46	185.63
Total Cost per unit	430	361.46	318.63

3)-

Unit contribution margin = Selling price per unit-Variable cost per unit

Unit contribution margin per canoes =$503-$133 per unit=$370 per unit

Contribution margin ratio = Contribution margin per unit/Selling price per unit*100

                                           =$370 per unit/$503 per unit*100

                                           =73.56%

4)-

RIVERSIDE INC.
CONTRIBUTION MARGIN INCOME STATEMENT
FOR THE NEXT YEAR
PARTICULARS		AMOUNT
Sales value	850 canoes*$503 per unit	427550
Less:- Variable cost	850 canoes*$133 per unit	113050
Contribution Margin		314500
Less:- Fixed cost		148500
Net opreating Income		166000