Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hawk Homes, Inc., makes one type of birdhouse that it sells for $30.70 each. Its variable cost is $13.90 per house, and its fixed costs

Hawk Homes, Inc., makes one type of birdhouse that it sells for $30.70 each. Its variable cost is $13.90 per house, and its fixed costs total $14,683.20 per year. Hawk currently has the capacity to produce up to 2,900 birdhouses per year, so its relevant range is 0 to 2,900 houses.

Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,110 birdhouses this year.

2. Without any calculations, determine Hawks total contribution margin if the company breaks even.

3. Calculate Hawks contribution margin per unit and its contribution margin ratio.

4. Calculate Hawks break-even point in number of units and in sales revenue.

5. Suppose Hawk wants to earn $24,000 this year. Determine how many birdhouses it must sell to generate this amount of profit.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

2nd edition

9780077493677, 78025516, 77493672, 9780077826482, 978-0078025518

More Books

Students also viewed these Accounting questions

Question

The symbol Answered: 1 week ago

Answered: 1 week ago