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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 Total costs Variable costs Fixed costs Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Unit contribution margin Contribution margin ratio Sales revenue Variable costs Gross margin Fixed costs Contribution margin Cost of goods sold Variable costs Gross margin Scenario 1 Raises Sales Price to $750 per Canoe 500 S $ 92,500 178,500 $ 271,000 565-000 $185.00 357.00 $542.00 Riverside sells its canoes for $650 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. 565.00 75.33 % Contribution Margin Income Statement S 750,000 $ 715,000 $ 129,500 178,500 $308,000 Scenario 2 Increase Sales Price and Variable Cost per Unit by 10 Percent S 700 $185.00 255.00 $ 440.00 $5,115,000 511.50 71.54 % $ 17 $ 157,250 178,500 $ 335,750 S 850 $185.00 210.00 $395.00 Scenario 3 Decrease Fixed Cost by 20 Percent 465.00 71.54% 650,000 S 650,000

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 Total costs Variable costs Fixed costs Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Unit contribution margin Contribution margin ratio Sales revenue Variable costs Gross margin Fixed costs Contribution margin Cost of goods sold Variable costs Gross margin Scenario 1 Raises Sales Price to $750 per Canoe 500 S $ 92,500 178,500 $ 271,000 565-000 $185.00 357.00 $542.00 Riverside sells its canoes for $650 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. 565.00 75.33 % Contribution Margin Income Statement S 750,000 $ 715,000 $ 129,500 178,500 $308,000 Scenario 2 Increase Sales Price and Variable Cost per Unit by 10 Percent S 700 $185.00 255.00 $ 440.00 $5,115,000 511.50 71.54 % $ 17 $ 157,250 178,500 $ 335,750 S 850 $185.00 210.00 $395.00 Scenario 3 Decrease Fixed Cost by 20 Percent 465.00 71.54% 650,000 S 650,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 Total costs Variable costs Fixed costs Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Unit contribution margin Contribution margin ratio Sales revenue Variable costs Gross margin Fixed costs Contribution margin Cost of goods sold Variable costs Gross margin Net operating income Scenario 1 Raises Sales Price to $750 per Canoe $ 565.00 75,33 % $ 500 Riverside sells its canoes for $650 each. Next year Riverside expects to sell 1,000 canoes. $ 92,500 178,500 $ 271,000 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. 565,000 $185.00 357.00 $ 542.00 $ 386,500 Contribution Margin Income Statement 750,000 $ Scenario 2 Increase Sales Price and Variable Cost per Unit by 10 Percent $ $ 129,500 178,500 $308,000 511.50 71.54% 715,000 700 $185.00 255.00 $ 440.00 $5,115,000 $ 333,000 $ 157,250 178,500 $ 335,750 $185.00 210.00 $395.00 $ 850 Scenario 3 Decrease Fixed Cost by 20 Percent 465.00 71.54 % $ 650,000 $ 650,000 $ 322,200
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 Total costs Variable costs Fixed costs Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Unit contribution margin Contribution margin ratio Sales revenue Variable costs Gross margin Fixed costs Contribution margin Cost of goods sold Variable costs Gross margin Net operating income Scenario 1 Raises Sales Price to $750 per Canoe $ 565.00 75,33 % $ 500 Riverside sells its canoes for $650 each. Next year Riverside expects to sell 1,000 canoes. $ 92,500 178,500 $ 271,000 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. 565,000 $185.00 357.00 $ 542.00 $ 386,500 Contribution Margin Income Statement 750,000 $ Scenario 2 Increase Sales Price and Variable Cost per Unit by 10 Percent $ $ 129,500 178,500 $308,000 511.50 71.54% 715,000 700 $185.00 255.00 $ 440.00 $5,115,000 $ 333,000 $ 157,250 178,500 $ 335,750 $185.00 210.00 $395.00 $ 850 Scenario 3 Decrease Fixed Cost by 20 Percent 465.00 71.54 % $ 650,000 $ 650,000 $ 322,200
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