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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.

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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(The following information applies to the questions displayed below) 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 1,300 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 ($120 fixed) Supervisor's salary Haintenance ($250 fixed) Depreciation Total Cost $ 2,100 7,500 560 3,300 460 700 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 1,500 units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 n A Contribution Margin Ratio Required 2 > per Birdbath %
Transcribed Image Text:(The following information applies to the questions displayed below) 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 1,300 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 ($120 fixed) Supervisor's salary Haintenance ($250 fixed) Depreciation Total Cost $ 2,100 7,500 560 3,300 460 700 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 1,500 units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 n A Contribution Margin Ratio Required 2 > per Birdbath %
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