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 1,500 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Total Cost Direct materials $2,100 Direct labor 7,900 Utilities ($130 fixed) Supervisor's salary 2,600 Maintenance ($310 fixed) 460 Depreciation 850 E5-5 (Algo) Calculating Contribution Margin and Contribution Margin Ratio, Preparing Contribution Margin Income Statement [LO 5-5] Suppose it sells each birdbath for $22. Required: 1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. = = 620 = Unit Contribution Margin = Contribution Margin Ratio Morning Dove Company Contribution Margin Income Statement Expected for 1,700 Units Contribution margin per Birdbath 2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,700 units. %

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Chapter1: Financial Statements And Business Decisions
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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 0 to 1,900 units, and monthly production costs for the production of 1,500 units follow. Morning Dove's
utilities and maintenance costs are mixed with the fixed components shown in parentheses.
Production Costs
Total Cost
Direct materials
Direct labor
Depreciation
Utilities ($130 fixed)
620
Supervisor's salary 2,600
Maintenance ($310 fixed) 460
=
=
E5-5 (Algo) Calculating Contribution Margin and Contribution Margin Ratio, Preparing
Contribution Margin Income Statement [LO 5-5]
Suppose it sells birdbat for $22.
Required:
1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold.
=
=
$2,100
7,900
850
Unit Contribution Margin
Contribution Margin Ratio
Contribution margin
Net operating income
Morning Dove Company
Contribution Margin Income Statement
Expected for 1,700 Units
2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,700 units.
per Birdbath
%
Transcribed Image Text: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 1,500 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Total Cost Direct materials Direct labor Depreciation Utilities ($130 fixed) 620 Supervisor's salary 2,600 Maintenance ($310 fixed) 460 = = E5-5 (Algo) Calculating Contribution Margin and Contribution Margin Ratio, Preparing Contribution Margin Income Statement [LO 5-5] Suppose it sells birdbat for $22. Required: 1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. = = $2,100 7,900 850 Unit Contribution Margin Contribution Margin Ratio Contribution margin Net operating income Morning Dove Company Contribution Margin Income Statement Expected for 1,700 Units 2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,700 units. per Birdbath %
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