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. %
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. %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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