Problem
Riverside Inc. makes one model of wooden canoe. Partial information for it follows:
|
Number of Canoes Produced and Sold
|
400
|
600
|
750
|
|
Total costs
|
|
|
|
|
Variable costs
|
52,000
|
78,000
|
97,500
|
|
Fixed costs
|
180,000
|
180,000
|
180,000
|
|
Total costs
|
232,000
|
258,000
|
277,500
|
|
Cost per unit
|
|
|
|
|
Variable cost per unit
|
130.00
|
130.00
|
130.00
|
|
Fixed cost per unit
|
450.00
|
300.00
|
240.00
|
|
Total cost per unit
|
580.00
|
430.00
|
370.00
|
Riverside sells its canoes for $660 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.
Scenerio 1 Rises Sales Price to $760 per canoe
Scenerio 2 Increases Sales Price and Variable Cost per Unit by 10%
Scenerio 3 Decrese Fixed Cost by 20%.