Answers

1 Number of Canoes produced and sold 500 500

Total Cost:
Variable Cost $72,500 $72,500
Fixed Cost $166,000 $166,000
Total Cost $238,500 $238,500
Cost per unit
Variable Cost per unit $145 $145
Fixed Cost per unit $332 $332
Total cost per unit $477 $477

2 Unit contribution Margin: 500 unit 730 unit

(Sales revenue-Variable cost)
Sales $295,000 430700
(500*590) (730*590)
Variable cost $72,500 $72,500
Unit contribution Margin $222,500 $358,200

Contribution margin ratio 75.42% 83.17%

(Contribution margin/sales revenue)*100

3 SYDNEY Bank Inc

Contribution margin income statement
For the current year
Particulars Amount
Sales revenue $495,600
(840*590)
Less Variable cost -$121,800
(840*145)
Contribution margin $373,800
Less Fixed cost -$166,000

Income from operation $207,800

4 Braek even units 239 Units

(Fixed cost/Contribution per unit)=166000/(840-145)
Braek even sales revenue:
(Fixed cost/contribution margin ratio) $221,333
(166000/75%)

contribution margin ratio:

 (Contribution margin/sales revenue)*100 75%
(373800/495600)*100

Note: The problem number 4 is solved by assuming the sales unit is 840 and
selling price is 590.

5 Target sales unit for earning $73000 profit 166,105 Units

(Fixed cost+target profit/contribution per unit)
166000+73000/840-145
 730

$72,500
$166,000
$238,500

$99
$227
$327
 Total Manufacturing Dept.
Particulars Basis of allocation
Dep.1 Dep.2
General Overhead Actual 86850 32400 29200
Indirect labour
 Service Dept.
Dep.1 Dep.2
12400 12850