Riverside Incorporated makes one model of wooden canoe. Partial information for ows Number of Canoes Produced and Sold Total costs Variable costs Fixed costs Unit contribution margin Contribution margin ratio Sales revenue Variable costs Contribution margin Fixed costs Not operating income Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit 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. Scenario 1 Raises Sales Price to $750 per Canoe $ 550 540.00 $ 115,500 198,000 $ 313,500 $ 210.00 360.00 $ 570.00 750 $ 157,500 198,000 $ 355,500 72.00% Contribution Margin Income Statement $ 210.00 264.00 $ 474.00 Scenario 2 Increase Sales Price and Variable Cost per Unit by 10 Percent 484.00 67.69% $ 189,000 198,000 $ 387,000 $ $ 210.00 220.00 $ 430.00 Scenario 3 Decrease Fixed Cost by 20 Percent 440.00 67.69%
Riverside Incorporated makes one model of wooden canoe. Partial information for ows Number of Canoes Produced and Sold Total costs Variable costs Fixed costs Unit contribution margin Contribution margin ratio Sales revenue Variable costs Contribution margin Fixed costs Not operating income Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit 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. Scenario 1 Raises Sales Price to $750 per Canoe $ 550 540.00 $ 115,500 198,000 $ 313,500 $ 210.00 360.00 $ 570.00 750 $ 157,500 198,000 $ 355,500 72.00% Contribution Margin Income Statement $ 210.00 264.00 $ 474.00 Scenario 2 Increase Sales Price and Variable Cost per Unit by 10 Percent 484.00 67.69% $ 189,000 198,000 $ 387,000 $ $ 210.00 220.00 $ 430.00 Scenario 3 Decrease Fixed Cost by 20 Percent 440.00 67.69%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Riverside Incorporated makes one model of wooden canoe. Partial information for
Number of Canoes Produced and Sold
Total costs
Variable costs
Fixed costs
Unit contribution margin
Contribution margin ratio
Sales revenue
Variable costs
Contribution margin
Fixed costs
www
Total costs
Cost per unit
Variable cost per unit
$ 210.00
220.00
Fixed cost per unit)
Total cost per unit
$ 430.00
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.
Net operating income
Scenario 1 Raises
Sales Price to $750
per Canoe
550
$
$ 115,500
198,000
$ 313,500
$ 210.00
360.00
$ 570.00
750
$ 157,500
198,000
$ 355,500
540.00
72.00%
Contribution Margin Income Statement
$ 210.00
264.00
$ 474.00
Scenario 2 Increase
Sales Price and
Variable Cost per
Unit by 10 Percent
$
484.00
67.69%
ows
$ 189,000
198,000
$ 387,000
Scenario 3
Decrease Fixed
Cost by 20 Percent
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67.69%
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