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 02,300 units, and monthly production costs for the production of 1,800 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 7,700 Utilities ($120 fixed) 640 Supervisors salary 3,400 Maintenance ($350 fixed) 470 Depreciation 800 Suppose it sells each birdbath for $28. 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 2,000 units. (Round your intermediate calculation to two decimal place.)
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