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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Sandy Bank, Inc., makes one model of wooden canoe. Partial information for it follows:
| Â Â Number of Canoes Produced and Sold | Â | 450 | Â | 650 | Â | 800 |
| Â Â Total costs | Â | Â | Â | Â | Â | Â |
| Â Â Â Â Â Variable costs | $ | 67,500 | $ | 97,500 | $ | 120,000 |
| Â Â Â Â Â Fixed costs | Â | 374,400 | Â | 374,400 | Â | 374,400 |
| Â | Â | Â | Â | Â | Â | Â |
| Â Â Total costs | $ | 441,900 | $ | 471,900 | $ | 494,400 |
| Â | Â | Â | Â | Â | Â | Â |
| Â Â Cost per unit | Â | Â | Â | Â | Â | Â |
| Â Â Â Â Â Variable cost per unit | $ | 150.00 | $ | 150.00 | $ | 150.00 |
| Â Â Â Â Â Fixed cost per unit | Â | 832.00 | Â | 576.00 | Â | 468.00 |
| Â | Â | Â | Â | Â | Â | Â |
| Â Â Â Â Â Total cost per unit | $ | 982.00 | $ | 726.00 | $ | 618.00 |
| Â | Â | Â | Â | Â | Â | Â |
| Â | ||||||
|
Sandy Bank sells its canoes for $450 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. (Round your "Unit" answer to the nearest whole number. Round your intermediate calculations to whole dollars and percentages.) |
| Â | Â |
| Â | Â |
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| 2. | If Sandy Bank sells 900 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $600.) (Round your answers to the nearest whole number.) |
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| Â | Â |
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| 3. | Calculate the number of canoes that Sandy Bank must sell at $600 each to generate $110,000 profit.(Round your answer to the nearest whole number.) |
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