Question
In: Accounting
Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all...
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 0–1,800 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 | Total Cost | |
| Direct materials | $ | 2,700 |
| Direct labor | 7,100 | |
| Utilities ($110 fixed) | 600 | |
| Supervisor’s salary | 3,100 | |
| Maintenance ($320 fixed) | 510 | |
| Depreciation | 700 | |
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.
Solutions
ekkarill92 answered 8 months agoRelated Solutions
Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all...
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 0–1,800 units, and monthly production
costs for the production of 1,400 units follow. Morning Dove’s
utilities and maintenance costs are mixed with the fixed components
shown in parentheses.
Production Costs
Total Cost
Direct materials
$
2,900
Direct labor
7,100
Utilities ($110 fixed)
570
Supervisor’s salary
2,600
Maintenance ($280 fixed)
500
Depreciation
900
Suppose it sells...
Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all...
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 0–2,300 units, and monthly production
costs for the production of 1,900 units follow. Morning Dove’s
utilities and maintenance costs are mixed with the fixed components
shown in parentheses.
Production Costs
Total
Cost
Direct materials
$
3,100
Direct labor
7,500
Utilities ($130 fixed)
590
Supervisor’s salary
2,800
Maintenance ($330 fixed)
480
Depreciation
700
Suppose it sells...
Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all...
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 0–1,900 units, and monthly production
costs for the production of 1,600 units follow. Morning Dove’s
utilities and maintenance costs are mixed with the fixed components
shown in parentheses.
Production Costs
Total Cost
Direct materials
$
1,500
Direct labor
7,300
Utilities ($150 fixed)
560
Supervisor’s salary
3,400
Maintenance ($300 fixed)
540
Depreciation
750
Suppose it sells...
Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all...
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 0–1,600 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
Total Cost
Direct materials
$
3,100
Direct labor
7,100
Utilities ($130 fixed)
590
Supervisor’s salary
3,500
Maintenance ($310 fixed)
540
Depreciation
850
Required:
1. Identify...
E5-2 Determining Cost Behavior and Calculating Expected Cost [LO 5-1] Morning Dove Company manufactures one model...
E5-2 Determining Cost Behavior and Calculating Expected Cost [LO
5-1]
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 0–1,700 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
Total
Cost
Direct materials
$
1,900
Direct labor
7,300
Utilities ($130 fixed)
550
Supervisor’s salary...
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May
June
July
August
September
October
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10000
2000
4000
3000
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Garfield Company manufactures a popular brand of dog repellant
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