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PA6-3 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point, Target Profit (LO 6-1, 6-2) Hawk Homes, Inc., makes one type of birdhouse that it
PA6-3 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point, Target Profit (LO 6-1, 6-2) Hawk Homes, Inc., makes one type of birdhouse that it sells for $29.70 each. Its variable cost is $14.50 per house, and its fixed costs total $13,011.20 per year. Hawk currently has the capacity to produce up to 2,200 birdhouses per year, so its relevant range is O to 2,200 houses. Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,200 birdhouses this year. 2. Without any calculations, determine Hawk's total contribution margin if the company breaks even. 3. Calculate Hawk's contribution margin per unit and its contribution margin ratio. 4. Calculate Hawk's break-even point in number of units and in sales revenue. 5. Suppose Hawk wants to earn $23,000 this year. Determine how many birdhouses it must sell to generate this amount of profit. Required Required Required Required Required 1 2. 3 4 5 Prepare a contribution margin income statement for Hawk assuming it sells 1,200 birdhouses this year. (Enter your answers rounded to 2 decimal places.) HAWK HOMES, INC. Contribution Margin Income Statement Sales Revenue $ 35,640.00 Variable Costs 17,400.00 Contribution Margin Income from Operations Required Required Required Required Required 1 2 3 4 5 Without any calculations, determine Hawk's total contribution margin if the company breaks even. (Enter your answer rounded to 2 decimal places.) Total Contribution Margin Required Required Required Required Required 1 2 3 4 5 Calculate Hawk's contribution margin per unit and its contribution margin ratio. (Round your answers to 2 decimal places. (i.e. .1234 should be entered as 12.34%.)) Unit Contribution Margin Contribution Margin Ratio % Required Required Required Required Required 1 2 3 4 5 Calculate Hawk's break-even point in number of units and in sales revenue. (Round your "Sales Revenue" answer to 2 decimal places and "Unit" answer to the nearest whole number.) Show less Units Break-Even Units Break-Even Sales Revenue Required Required Required Required Required 1 2 3 4 5 Suppose Hawk wants to earn $23,000 this year. Determine how many birdhouses it must sell to generate this amount of profit. (Round your answer to the nearest whole number.) Target Unit Sales Units
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