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Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all...

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Accounting

Morning Dove Company manufactures one model of birdbath, whichis very popular. Morning Dove sells all units it produces eachmonth. The relevant range is 0–1,800 units, and monthly productioncosts for the production of 1,300 units follow. Morning Dove’sutilities and maintenance costs are mixed with the fixed componentsshown in parentheses.  

Production CostsTotal Cost
Direct materials$2,700
Direct labor7,100
Utilities ($110 fixed)600
Supervisor’s salary3,100
Maintenance ($320 fixed)510
Depreciation700

Suppose it sells each birdbath for $20.

Required:

1. Calculate the unit contribution margin andcontribution margin ratio for each birdbath sold.

2. Complete the contribution margin incomestatement assuming that Morning Dove produces and sells 1,500units.

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