Riverside Inc. makes one model of wooden canoe. Partial information for it follows: Riverside...


Riverside Inc. makes one model of wooden canoe. Partial information for it follows:

Number of Canoes Produced and Sold 450 650 900
Total costs
Variable costs 69,750 100,750 139,500
Fixed costs 234,000 234,000 234,000
Total costs 303,750 334,750 373,500
Cost per unit
Variable cost per unit 155.00 155.00 155.00
Fixed cost per unit 520.00 360.00 260.00
Total cost per unit 675.00 515.00 415.00

Riverside sells its canoes for $750 each. Next year Riverside expects to sell 1,000 canoes.


Prepare Riverside's contribution margin income statement for each independent scenario. Assuming each scenario is a variation of Riverside's original data. (Round your "Unit Contribution Margin/Ratio" to2 decimal places, and all other answers to the nearest whole dollar amount.)

Contribution margin income statement

The contribution margin income statement is an income statement where all the variable costs are deducted from the sales to give the contribution margin, from which the fixed costs are deducted to arrive at the net operating income.

Answer and Explanation: 1

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The income statements will look like this:

Riverside Inc.

Contribution Margin Income Statement for the period ended

450 units 650 units 900...

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Creating Contribution Margin Income Statements


Chapter 8 / Lesson 10

Contribution margin income statements subtract fixed costs from total sales to give a picture of how much is available for spending. Learn how these statements are produced, their importance to budgeting, and what distinguishes them from regular income statements.

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