equired information orning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it oduces each month. The relevant range is 0-1,600 units, and monthly production costs for the production of 1,300 units llow. 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 ($300 fixed) Depreciation Total Cost $1,900 7,700 590 it sells each birdbath for $28. d: 3,200 500 750 ate the unit contribution margin and contribution margin ratio for each birdbath sold. lete the contribution margin income statement assuming that Morning Dove produces and sells 1.500 units
equired information orning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it oduces each month. The relevant range is 0-1,600 units, and monthly production costs for the production of 1,300 units llow. 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 ($300 fixed) Depreciation Total Cost $1,900 7,700 590 it sells each birdbath for $28. d: 3,200 500 750 ate the unit contribution margin and contribution margin ratio for each birdbath sold. lete the contribution margin income statement assuming that Morning Dove produces and sells 1.500 units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 0-1,600 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 ($300 fixed)
Depreciation.
Total Cost
$1,900
7,700
590
3,200
500
750
Suppose it sells each birdbath for $28.
Required:
1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold.
2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,500 units.
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