Question
Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is
Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 01,900 units, and monthly production costs for the production of 1,500 units follow. Morning Doves utilities and maintenance costs are mixed with the fixed components shown in parentheses.
Production Costs | Total Cost | |
Direct materials | $ | 1,900 |
Direct labor | 7,900 | |
Utilities ($130 fixed) | 650 | |
Supervisors salary | 2,800 | |
Maintenance ($310 fixed) | 480 | |
Depreciation | 850 | |
Suppose it sells each birdbath for $20. Required: 1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. (Round Variable cost per unit to 2 decimal places. Enter all amounts as positive values.) 2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,700 units. (Round your intermediate calculation to two decimal place.)
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