Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

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 01,700 units, and monthly production costs for the production of 1,200 units follow. Morning Doves utilities and maintenance costs are mixed with the fixed components shown in parentheses.

Production Costs Total Cost
Direct materials $ 2,700
Direct labor 7,300
Utilities ($140 fixed) 570
Supervisors salary 2,800
Maintenance ($330 fixed) 490
Depreciation 850

Required:

1. Identify each cost as variable, fixed, or mixed, and express each cost as a rate per month or per unit (or combination thereof).

2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove.

3. State Morning Doves linear cost equation for a production level of 01,700 units. Enter answer as an equation in the form of y = a + bx.

4. Calculate Morning Doves expected total cost if production increased to 1,400 units per month. Enter answer as an equation in the form of y = a + bx.

image text in transcribed

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 1,400 units.

image text in transcribed

Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Identify each cost as variable, fixed, or mixed, and express each cost as a rate per month or per unit (or combination thereof). (Round your per unit value to 2 decimal places.) Production Costs Behavior Direct Materials per Month Rate per Unit per Unit per Unit Direct labor Utilities per Month per Month per Month Supervisor's Salary per Unit Maintenance per Month per Unit per Unit Depreciation per Month Required 1 Required 2 > Required 1 Required 2 Required 3 Required 4 Determine the total fixed cost per month and the variable cost per unit for Morning Dove. (Round your intermediate calculations and variable cost per unit to 2 decimal places.) Total Variable Cost per Unit Total Fixed Cost per Month Required 1 Required 2 Required 3 Required 4 State Morning Dove's linear cost equation for a production level of 0-1,700 units. Enter answer as an equation in the form of y = a + bx. (Round your intermediate calculations and variable cost per unit to 2 decimal places.) Total Cost Required 1 Required 2 Required 3 Required 4 Calculate Morning Dove's expected total cost if production increased to 1,400 units per month. Enter answer as an equation in the form of y = a + bx. (Round intermediate calculations and variable cost per unit to 2 decimal places.) y Required 1 Required 2 Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. (Round Variable cost per unit to 2 decimal places. Round your contribution margin ratio to 2 decimal places. Enter all amounts as positive values.) = Unit Contribution Margin per Bird bath = Contribution Margin Ratio Required 1 Required 2 Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,400 units. (Round your intermediate calculation to 2 decimal places.) MORNING DOVE COMPANY Contribution Margin Income Statement Expected for 1,400 Units Contribution Margin Net Operating Income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Introduction to Managerial Accounting

Authors: Peter C. Brewer, Ray H Garrison, Eric Noreen

8th edition

1259917061, 978-1259917066

Students also viewed these Accounting questions