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Current Designs Problem 5 Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak. Kevlar $230 per kayak Resin and supplies $190 per kayak Finishing kit (seat, rudder, ropes, etc.) $160 per kayak Labor $450 per kayak Selling and administrative expensesvariable $400 per kayak Selling and administrative expensesfixed $172,400 per year Manufacturing overheadfixed $280,000 per year Bill and Diane have asked you to provide a cost-volume-profit analysis, to help them finalize the budget projections for the upcoming year. Bill has informed you that the selling price of the composite kayak will be $2,300.

Calculate variable costs per unit. Variable costs $ per unit

Determine the unit contribution margin. Contribution margin $ per unit

Using the unit contribution margin, determine the break-even point in units for this product line. Break-even point units

Assume that Current Designs plans to earn net income of $378,450 on this product line. Using the unit contribution margin, calculate the number of units that need to be sold to achieve this goal. Number of units to be sold units

Based on the most recent sales forecast, Current Designs plans to sell 1,000 units of this model. Calculate the margin of safety and the margin of safety ratio. (Round percentage to 1 decimal place, 25.5%.) Margin of safety $ Margin of safety ratio % Click if you would like to Show Work for this question: Open Show Work

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