Hawk Homes, Inc., makes one type of birdhouse that it sells for $30.90 each. Its variable cost is $14.60 per house, and its fixed costs total $14,115.80 per year. Hawk currently has the capacity to produce up to 2,700 birdhouses per year, so its relevant range is 0 to 2,700 houses.

Required:

1.

Prepare a contribution margin income statement for Hawk assuming it sells 1,260 birdhouses this year. (Enter your answers rounded to 2 decimal places.)

HAWK HOMES, INC.
Contribution Margin Income Statement
Contribution Margin
Income from Operations

Cost of Goods Sold

Fixed Costs

Gross Margin

Interest Expense

Net Income After Taxes

Net Operating Income

Sales Revenue

Variable Costs

2.

Without any calculations, determine Hawks total contribution margin if the company breaks even. (Enter your answers rounded to 2 decimal places.)

Total Contribution margin-

3.

Calculate Hawks contribution margin per unit and its contribution margin ratio. (Round your answers to 2 decimal places.)

Unit Contribution Margin
Contribution Margin Ratio		%

4.

Calculate Hawks break-even point in number of units and in sales revenue. (Round your "Sales Revenue" answer to 2 decimal places and "Unit" answer to the nearest whole number.)

Break even units- Units

Break even sales revenue- $

5.	Suppose Hawk wants to earn $27,000 this year. Determine how many birdhouses it must sell to generate this amount of profit. (Round up to the next whole number.) target unit sales- units