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Sandy Bank, Number of cances produced and sold Total costs Variable costs Fixed costs Incorporated, makes one model of woe Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit

Sandy Bank, Number of cances produced and sold Total costs Variable costs Fixed costs Incorporated, makes one model of woe Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit

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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Subject: accounting 

Sandy Bank, Incorporated, makes one model of wooden canoe. And, the information for it follows: Number of cances produced and sold Total costs Variable costs Fixed costs Total costs Cost per unit Variable cost per unit Fixed cost per unit 500 $ 90,000 $ 119,000 $ 209,000 $ 180.00 238.00 $ 418.00 700 $ 126,000 $119,000 $ 245,000 $ 180.00 170.00 $350.00 850 $ 153,000 $119,000 $ 272,000 $180.00 140.00 $ 320.00 Total cost per unit Sandy Bank sells its canoes for $475 each. Required: 1. Suppose that Sandy Bank raises its selling price to $600 per canoe. Calculate its new break-even point in units and in sales dollars. 2. If Sandy Bank sells 1,550 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $600) 3. Calculate the number of canoes that Sandy Bank must sell at $600 each to generate $120,000 profit.
Transcribed Image Text:Sandy Bank, Incorporated, makes one model of wooden canoe. And, the information for it follows: Number of cances produced and sold Total costs Variable costs Fixed costs Total costs Cost per unit Variable cost per unit Fixed cost per unit 500 $ 90,000 $ 119,000 $ 209,000 $ 180.00 238.00 $ 418.00 700 $ 126,000 $119,000 $ 245,000 $ 180.00 170.00 $350.00 850 $ 153,000 $119,000 $ 272,000 $180.00 140.00 $ 320.00 Total cost per unit Sandy Bank sells its canoes for $475 each. Required: 1. Suppose that Sandy Bank raises its selling price to $600 per canoe. Calculate its new break-even point in units and in sales dollars. 2. If Sandy Bank sells 1,550 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $600) 3. Calculate the number of canoes that Sandy Bank must sell at $600 each to generate $120,000 profit.
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