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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:

  1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold.
  2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,500 units.
  3. 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.
= Unit Contribution Margin
= per Birdbath
Sales Price = Contribution Margin Ratio
= %

Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,500 units.

Morning Dove Company
Contribution Margin Income Statement
Expected for 1,500 Units
Sales revenue
Variable costs
Contribution margin
Fixed costs
Net operating income

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