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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 1,900 units, and monthly production costs for the production of 1,400 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parenthese Production Costs Direct materials Direct labor Utilities ($120 fixed) Supervisor's salary Maintenance ($340 fixed) Depreciation Total Cost $ 1,500 7,300 570 2,900 530 850 Suppose it sells each birdbath for $24. 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 1,600 units.
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