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Calculate the unit contribution margin

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Reference no: EM131566450

Problem - 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 0-2,200 units, and monthly production costs for the production of 1,800 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses.

Production CostsTotal CostDirect materials$1,900Direct labor 7,700Utilities ($130 fixed) 630Supervisor's salary 3,400Maintenance ($300 fixed) 450Depreciation 750

Suppose it sells each birdbath for $28.

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.)

2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 2,000 units. (Round your intermediate calculation to two decimal place.)

Reference no: EM131566450

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