Answered step by step
Verified Expert Solution
Link Copied!

Question

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

image text in transcribedimage text in transcribed

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 0-1,600 units, and monthly production costs for the production of 1,300 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($110 fixed) Supervisor's salary Maintenance ($280 fixed) Depreciation Total Cost $2,100 6,700 580 3,100 540 800 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 Dove's linear cost equation for a production level of 01,600 units. Enter answer as an equation in the form of y= a + bx. 4. Calculate Morning Dove's expected total cost if production increased to 1,500 units per month. Enter an equation in the form of y = a + bx. 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.) Behavior Rate Production Costs Direct Materials Variable per Unit $ O per Month Direct labor Variable per Unit $ 0 per Month Utilities Mixed per Unit $ 110 per month 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 0-1,600 units, and monthly production costs for the production of 1,300 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($110 fixed) Supervisor's salary Maintenance ($280 fixed) Depreciation Total Cost $2,100 6,700 580 3,100 540 800 Suppose it sells each birdbath for $20. 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. Complete this question by entering your answers in the tabs below. 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 Birdbath Contribution Margin Ratio %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Auditing That Matters Case Studies Discussion Guide

Authors: Norman Marks

1st Edition

B089J5JCL2, 979-8650410546

More Books

Students also viewed these Accounting questions

Question

6. Conclude with the same strength as in the introduction

Answered: 1 week ago

Question

7. Prepare an effective outline

Answered: 1 week ago