E5-18 (Algo) Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin Income Statement [LO 5-5] Riverside Incorporated makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold 450 650 900 Total costs Variable costs Fixed costs Total costs $ 69,750 234,000 $ 303,750 $ 100,750 234,000 Cost per unit Variable cost per unit Fixed cost per unit $ 155.00 520.00 $ 675.00 $ 515.00 $ 334,750 $ 155.00 360.00 $ 139,500 234,000 $ 373,500 $ 155.00 260.00 $ 415.00 Total cost per unit Riverside sells its canoes for $750 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. Note: Round your unit contribution margin and contribution margin ratio to 2 decimal places (i.e. 0.1234 should be entered as 12.34%) and all other answers to the nearest dollar amount. Scenario 2 Increase Scenario 1 Raises Sales Price to $850 per Canoe Sales Price and Variable Cost per Unit by 10 Percent Unit contribution margin Contribution margin ratio % Contribution Margin Income Statement Contribution margin Net operating income % Scenario 3 Decrease Fixed Cost by 20 Percent %
E5-18 (Algo) Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin Income Statement [LO 5-5] Riverside Incorporated makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold 450 650 900 Total costs Variable costs Fixed costs Total costs $ 69,750 234,000 $ 303,750 $ 100,750 234,000 Cost per unit Variable cost per unit Fixed cost per unit $ 155.00 520.00 $ 675.00 $ 515.00 $ 334,750 $ 155.00 360.00 $ 139,500 234,000 $ 373,500 $ 155.00 260.00 $ 415.00 Total cost per unit Riverside sells its canoes for $750 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. Note: Round your unit contribution margin and contribution margin ratio to 2 decimal places (i.e. 0.1234 should be entered as 12.34%) and all other answers to the nearest dollar amount. Scenario 2 Increase Scenario 1 Raises Sales Price to $850 per Canoe Sales Price and Variable Cost per Unit by 10 Percent Unit contribution margin Contribution margin ratio % Contribution Margin Income Statement Contribution margin Net operating income % Scenario 3 Decrease Fixed Cost by 20 Percent %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![E5-18 (Algo) Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin
Income Statement [LO 5-5]
Riverside Incorporated makes one model of wooden canoe. Partial information for it follows:
Number of Canoes Produced and Sold
450
650
900
Total costs
Variable costs
Fixed costs
Total costs
$ 69,750
234,000
$ 303,750
$ 100,750
234,000
Cost per unit
Variable cost per unit
Fixed cost per unit
$ 155.00
520.00
$ 675.00
$ 515.00
$ 334,750
$ 155.00
360.00
$ 139,500
234,000
$ 373,500
$ 155.00
260.00
$ 415.00
Total cost per unit
Riverside sells its canoes for $750 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.
Note: Round your unit contribution margin and contribution margin ratio to 2 decimal places (i.e. 0.1234 should be entered as
12.34%) and all other answers to the nearest dollar amount.
Scenario 2 Increase
Scenario 1 Raises
Sales Price to $850
per Canoe
Sales Price and
Variable Cost per
Unit by 10 Percent
Unit contribution margin
Contribution margin ratio
%
Contribution Margin Income Statement
Contribution margin
Net operating income
%
Scenario 3
Decrease Fixed
Cost by 20 Percent
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ec1ab1b-9cbe-4891-af68-dea9adbcaa76%2F395b0e9d-35f5-4387-9682-501e5b590bfe%2Fwxjusbf_processed.png&w=3840&q=75)
Transcribed Image Text:E5-18 (Algo) Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin
Income Statement [LO 5-5]
Riverside Incorporated makes one model of wooden canoe. Partial information for it follows:
Number of Canoes Produced and Sold
450
650
900
Total costs
Variable costs
Fixed costs
Total costs
$ 69,750
234,000
$ 303,750
$ 100,750
234,000
Cost per unit
Variable cost per unit
Fixed cost per unit
$ 155.00
520.00
$ 675.00
$ 515.00
$ 334,750
$ 155.00
360.00
$ 139,500
234,000
$ 373,500
$ 155.00
260.00
$ 415.00
Total cost per unit
Riverside sells its canoes for $750 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.
Note: Round your unit contribution margin and contribution margin ratio to 2 decimal places (i.e. 0.1234 should be entered as
12.34%) and all other answers to the nearest dollar amount.
Scenario 2 Increase
Scenario 1 Raises
Sales Price to $850
per Canoe
Sales Price and
Variable Cost per
Unit by 10 Percent
Unit contribution margin
Contribution margin ratio
%
Contribution Margin Income Statement
Contribution margin
Net operating income
%
Scenario 3
Decrease Fixed
Cost by 20 Percent
%
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