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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 0 to 1,600 units, and monthly production costs for the production of 1,300 units follow. Morning Doves utilities and maintenance costs are mixed with the fixed components shown in parentheses.
Production Costs | Total Cost |
---|---|
Direct materials | $ 3,100 |
Direct labor | 7,100 |
Utilities ($120 fixed) | 570 |
Supervisors salary | 2,800 |
Maintenance ($340 fixed) | 510 |
Depreciation | 800 |
Suppose it sells each birdbath for $30.
Required:
- Calculate the unit contribution margin and contribution margin ratio for each birdbath sold.
- Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,500 units.
- Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. Note: Round your intermediate calculations and final answer to 2 decimal places. Enter all amounts as positive values.
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Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,500 units.
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