Morning Dove Company manufactures one model of birdbath, whichis very popular. Morning Dove sells all units it produces eachmonth. The relevant range is 0–1,800 units, and monthly productioncosts for the production of 1,300 units follow. Morning Dove’sutilities and maintenance costs are mixed with the fixed componentsshown in parentheses. Â
| Production Costs | Total Cost |
| Direct materials | $ | 2,700 |
| Direct labor | | 7,100 |
| Utilities ($110 fixed) | | 600 |
| Supervisor’s salary | | 3,100 |
| Maintenance ($320 fixed) | | 510 |
| Depreciation | | 700 |
|
Suppose it sells each birdbath for $20.
Required:
1. Calculate the unit contribution margin andcontribution margin ratio for each birdbath sold.
2. Complete the contribution margin incomestatement assuming that Morning Dove produces and sells 1,500units.
