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 ($300 fixed) Depreciation Total Cost $ 2,900 8,100 580 2,500 500 700 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: . Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. . 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 ($300 fixed) Depreciation Total Cost $ 2,900 8,100 580 2,500 500 700 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: . Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. . 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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Please answer without image
![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 ($300 fixed)
Depreciation
Total Cost
$ 2,900
8,100
580
2,500
500
700
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%2F6ee18609-8433-4134-92fc-9df7e5f17d13%2F6123347f-3343-4965-abb9-7bd3e133fec4%2Fkd6rsp_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 ($300 fixed)
Depreciation
Total Cost
$ 2,900
8,100
580
2,500
500
700
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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