Reference no: EM13523383
Paddle Away, Inc., makes one model of wooden canoe. Partial information for it follows.
Number of canoes produced and sold------490
Total costs
Variable costs ------$73,500
Fixed costs---------159,740
Total costs------------$233,240
Cost per unit
Variable cost per unit------------$150.00
Fixed cost per unit---------------$326.00
Total cost per unit----------------$476.00
1: Suppose that Paddle Away raises its selling price to $710 per canoe. Calculate its new break-even point in units and in sales dollars. (Round your break-even units answer to the next whole number. Round your sales answer to the nearest whole number.
New break-even units :______ canoes
Break-even sales: $______
2: If Paddle Away sells 690 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $710.) (Round margin of safety to the nearest whole number. Round percentage of sales to 2 decimal places.
Margin of safety: $______
Percentage of sales:______%
3: Calculate the number of canoes that Paddle Away must sell at $710 each to generate $116,000 profit. (Round your answer to the next whole number.)