Question

Capital Manufacturer, Inc. makes one model of wooden canoes.
Partial information for it follows:
1) Complete the following table.
Number of canoes produced and sold:	500	700	850
Total Costs:
Variable Costs	77,000
Fixed Costs	180,000
Total Costs:
Cost per canoe:
Variable Cost per canoe
Fixed cost per canoe
Total Cost per canoe
2) Suppose Capital sells its canoes for $600 each.
Calculate the contribution margin per canoe and
the contribution margin ratio
3) This year Capital expects to sell 900 canoes.
Prepare a contribution margin income statement for the company.
4) Calculate Capital Manufacturer's break-even point in units and in sales $$$.
5) Suppose Capital Manufacturer wants to earn $82,000 profit this year.
Calculate the number of canoes that must be sold to achieve this target.

Answer 1