esE6-5 (Algo) Calculating Contribution Margin and Contribution Margin Ratio; Identifying Break-EvenPoint, Target Profit [LO 6-1, 6-2]Sandy Bank, Incorporated, makes one model of wooden canoe. Partial information is given below.Required:1. Complete the following table.2. Suppose Sandy Bank sells its canoes for $600 each. Calculate the contribution margin per canoe and the contribution margin ratio.3. This year Sandy Bank expects to sell 810 canoes for $600 each. Prepare a contribution margin income statement for the company.4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $600 each.5. Suppose Sandy Bank wants to earn $82,000 profit this year. Calculate the number of canoes that must be sold to achieve thistarget. Sandy Bank sells its canoes for $600 each.Complete this question by entering your answers in the tabs below.Required 1 Required 2Required 3 Required 4Complete the following table.Note: Round your "Cost per Unit" answers to 2 decimal places.Number of Canoes Produced and SoldTotal costsVariable Conta67AUG74Required 5400EO COOP< Prev600tv2 of 4Htt‒‒‒740Next >aHelpO 14:08edokttnces4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $600 each.5. Suppose Sa Bank wants to earn $82,000 profit this year. Calculate the number of canoes that must be sold to achievtarget. Sandy Bank sells its canoes for $600 each.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Number of Canoes Produced and SoldTotal costsComplete the following table.Note: Round your "Cost per Unit" answers to 2 decimal places.Variable CostsFixed CostsTotal CostsCost per UnitVariable Cost per UnitFixed Cost per UnitRequired 4Total Cost per Unit$$$400Required 5< Required 159,600128,400188,000$0.00 $< Prev6000$+0.00 $Required 2 >2 of 474000.00Next >10A C

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Answered: E6-5 (Algo) Calculating Contribution…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2CE

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SCM Company currently sells a camera for P12,000. An aggressive competitor has announced plans for a similar product that will be sold for P10,250. SCM's marketing department believes that if the price is dropped to meet competition, unit sales will increase by 10%. The current cost to manufacture and distribute the camera is P8,750, and SCM has a profit goal of 20% of sales. If SCM meets competitive selling prices, what is the company's target cost? P2,400. P8,200. P8,750. P9,600. None of the above
Sandy Bank, Inc., makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $590 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 770 canoes. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank’s break-even point in units and in sales dollars. 5. Suppose Sandy Bank wants to earn $75,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank, Inc., makes one model of wooden canoe. Partial information is given below. Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $590 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 770 canoes. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank’s…
The XYZ Company earns an after tax profit of P2,400 on sales of P88,000. The average tax rate of the company is 25%. The only product in this operation sells for P20 of which P15 is in variable cost. You were asked to analyze the breakeven point of this project and its sensitivity to changes in cost levels and product price. The monthly fixed cost in this operation is:
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ABC Office Furniture sells its primary product, an office chair, at R150 per unit. Total credit sales for the previous financial year were 4 000 units. The variable cost to manufacture one chair is R60 and the total fixed costs for the year are R80 000. The entity’s credit terms are 2/10 net 45 and it is considering tightening its credit standards to 3/7 net 30. This is expected to result in a 5% decrease in sales, but bad debt is expected to decrease from 2% of credit sales to 1%. The average collection period is expected to decrease from the current 45 days to 30 days. In the past, 20% of debtors accepted the discount. This percentage is not expected to change. The entity’s cost of capital is 14%. Assume 365 days per year. To calculate the effect of the tightening of credit standards, the entity needs to calculate the following: ■ the profit loss or gain from a decrease or an increase in sales ■ the cost of the marginal investment in accounts receivable ■ the cost of marginal bad…

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