Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells...
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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 01,600 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 ($130 fixed) Supervisor's salary Maintenance ($290 fixed) Depreciation Total Cost $ 2,700 7,700 570 2,600 500 850 Suppose it sells each birdbath for $20. Required: 1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. (Round Variable - = Sales Price $ Variable Cost per Unit $ 8.00 Unit Contribution Margin $ 12.00 per Birdbath 20.00 = Unit Contribution Margin $ 12.00 Sales Price $ Contribution Margin Ratio 60.00% 20.00 2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,500 units. (Round your intermediate calculation to two decimal place.) MORNING DOVE COMPANY Contribution Margin Income Statement Expected for 1,500 Units Sales Revenue | $ 26,000 Variable Costs | $ (10,400) Contribution Margin Fixed Costs 15,600 (3,870) $ Net Operating Income $ 11,730
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