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Required: 1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. 2. If Sandy Bank sells 680 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500) 3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $100,000 profit.

Required: 1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. 2. If Sandy Bank sells 680 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500) 3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $100,000 profit.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sandy Bank, Incorporated, makes one model of wooden canoe. And, the 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 Required 1 Required 2 Required 3 $ 52,000 $ 180,000 $ 232,000 400 New Break-Even Units Break-Even Sales Revenue $ 130.00 450.00 $ 580.00 Complete this question by entering your answers in the tabs below. Canoes 600 < Required 1 $ 78,000 $ 180,000 $ 258,000 Sandy Bank sells its canoes for $375 each. Required: 1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. 2. If Sandy Bank sells 680 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500) 3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $100,000 profit. $ 130.00 300.00 $ 430.00 750 Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. Note: Do not round intermediate calculations. Round your final answers to nearest whole number. $ 97,500 $ 180,000 $ 277,500 Required 2 > $ 130.00 240.00 $ 370.00
Transcribed Image Text:Sandy Bank, Incorporated, makes one model of wooden canoe. And, the 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 Required 1 Required 2 Required 3 $ 52,000 $ 180,000 $ 232,000 400 New Break-Even Units Break-Even Sales Revenue $ 130.00 450.00 $ 580.00 Complete this question by entering your answers in the tabs below. Canoes 600 < Required 1 $ 78,000 $ 180,000 $ 258,000 Sandy Bank sells its canoes for $375 each. Required: 1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. 2. If Sandy Bank sells 680 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500) 3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $100,000 profit. $ 130.00 300.00 $ 430.00 750 Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. Note: Do not round intermediate calculations. Round your final answers to nearest whole number. $ 97,500 $ 180,000 $ 277,500 Required 2 > $ 130.00 240.00 $ 370.00
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