Calculate the number of canoes that Sandy Bank must sell

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Reference no: EM132828807

Problem - Sandy Bank, Inc., makes one model of wooden canoe. And, the information for it follows:

Number of canoes produced and sold

500

700

850

Total costs

 

 

 

Variable costs

$85,000

$119,000

$144,500

Fixed costs

$238,000

$238,000

$238,000

Total costs

$323,000

$357,000

$382,500

Cost per unit

 

 

 

Variable cost per unit

$170.00

$170.00

$170.00

Fixed cost per unit

476.00

340.00

280.00

Total cost per unit

$646.00

$510.00

$450.00

Required -

1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars.

2. If Sandy Bank sells 1,530 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500.)

3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $120,000 profit.

Reference no: EM132828807

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