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 1,700 units, and monthly production costs for the production of 1,200 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 ($120 fixed) Supervisor's salary Maintenance ($320 fixed) Depreciation Total Cost $ 1,900 7,900 580 2,700 460 800 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. 2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,400 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 1,700 units, and monthly production costs for the production of 1,200 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 ($120 fixed) Supervisor's salary Maintenance ($320 fixed) Depreciation Total Cost $ 1,900 7,900 580 2,700 460 800 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. 2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,400 units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Calculate the unit contribution margin and contribution margin ratio for each birdbath sold.
Note: Round your intermediate calculations and final answer to 2 decimal places. Enter all amounts as positive values.
Unit Contribution Margin
Morning Dove Company
Contribution Margin Income Statement
Expected for 1,400 Units
Contribution margin
Net operating income
Contribution Margin Ratio
per Birdbath
![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 1,700 units, and monthly production costs for the production of 1,200
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 ($120 fixed)
Supervisor's salary
Maintenance ($320 fixed)
Depreciation
Total Cost
$ 1,900
7,900
580
2,700
460
800
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.
2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,400 units.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5439e5d7-6cf8-4551-b892-bda545ef22db%2F5e5a499f-6a85-4e61-b27a-b2cef9086f3f%2Fkl6499e_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 1,700 units, and monthly production costs for the production of 1,200
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 ($120 fixed)
Supervisor's salary
Maintenance ($320 fixed)
Depreciation
Total Cost
$ 1,900
7,900
580
2,700
460
800
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.
2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,400 units.
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