Required information [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 1,800 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 ($290 fixed) Depreciation Total Cost $ 2,900 7,300 650 3,000 470 750 Suppose it sells each birdbath for $20. 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 information [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 1,800 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 ($290 fixed) Depreciation Total Cost $ 2,900 7,300 650 3,000 470 750 Suppose it sells each birdbath for $20. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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.
Variable Cost per Unit
Sales price per unit
$
Unit Contribution Margin
Sales revenue
Variable costs
Contribution margin
Fixed costs
20.00
Net operating income
1
Sales price per unit
$
20.00
= Unit Contribution Margin
=
=
Contribution Margin Ratio
Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,500 units.
Morning Dove Company
Contribution Margin Income Statement
Expected for 1,500 Units
per Birdbath
%
![Required information
[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 1,800 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 ($290 fixed)
Depreciation
Total Cost
$ 2,900
7,300
650
3,000
470
750
Suppose it sells each birdbath for $20.
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55beefac-0551-4966-be0e-7b8fb0305cf3%2F17ba177b-c1ab-4aa8-81ba-c3168307e030%2Folzr5j_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[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 1,800 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 ($290 fixed)
Depreciation
Total Cost
$ 2,900
7,300
650
3,000
470
750
Suppose it sells each birdbath for $20.
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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