3. Suppose Riverside sells its canoes for $518 each. Calculate the contribution

Question

3. Suppose Riverside sells its canoes for $518 each. Calculate the contribution margin per canoe and the contribution margin ratio. (Round your contribution margin to the nearest whole dollar and your contribution margin ratio to the nearest whole percent.) Unit Contribution Margin Contribution Margin Ratio 4. Next year Riverside expects to sell 840 canoes. Complete the contribution margin income statement for the company. RIVERSIDE INC Contribution Margin Income Statement For the Next Year Contribution Margin Net Operating Income

Explanation / Answer

a) Schedule :

2) Contribution margin per unit = 518-136 = 382 per unit

Contribution margin ratio = 38200/518 = 74%

3) Contribution margin statement :

490 640 790 Total cost Variable cost 66640 87040 107440 Fixed cost 148200 148200 148200 Total cost 214840 235240 255640 Cost per unit Variable cost per unit 136 136 136 Fixed cost per unit 302.45 231.56 187.59 Total cost per unit 438.45 367.56 323.59

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