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 0-2,000 units, and monthly production costs for the production of 1,700 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Total Cost $ 2,100 8,100 590 Direct materials Direct labor Utilities ($130 fixed) Supervisor's salary Maintenance ($310 fixed) Depreciation 2,800 530 750 Suppose it sells each birdbath for $26 Required: 1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. (Round Variable cost per unit to 2 decimal places. Enter all amounts as positive values.) Variable Cost per Unit Sales Price Unit Contribution Margin = 26.00 per Birdbath Unit Contribution Margin Sales Price / Contribution Margin Ratio = $ 26.00 %

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Q: How is cost-volume-profit analysis useful?

A:

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