Hawk Homes, Inc., makes one type of birdhouse that it sells for $30 each. Its variable cost is $15 per house, and its fixed costs total $13,840 per year. Hawk currently has the capacity to produce up to 2,000 birdhouses per year, so its relevant range is 0 to 2,000 houses.

Required:

1. Prepare contribution margin income statement for Hawk assuming it sells 1,100 birdhouses this year

Contribution Margin

Income from Operations

2 Without any calculations, determine Hawk's total contribution margin if the company breaks even.

3. Calculate Hawk's contribution margin per unit and its contribution margin ratio.

4. Calculate Hawk's break-even point in number of units and in sales revenue. (Round your "Unit" and "Sales Revenue" answers to the nearest whole number.)

5. Suppose Hawk wants to earn $20,000 this year. Determine how many birdhouses it must sell to generate this amount of profit.