Hawk Homes, Inc., makes one type of birdhouse that it sells for $30.40 each. Its variable...

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Hawk Homes, Inc., makes one type of birdhouse that it sells for $30.40 each. Its variable cost is $13.40 per house, and its f

Saved Hawk Homes, Inc., makes one type of birdhouse that it sells for $30.40 each. Its variable cost is $13.40 per house, and

Hawk Homes, Inc., makes one type i biurouse o Sen cotal $14,688.00 per year. Hawk currently has the capacity to produce up to

total $14,688.00 per year. Hawk currently has the capacity to produce up to 2,400 birdhouse 2,400 houses. Required: 1. Prepar

business accounting

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Answer 1

Answer #1

1) Contribution margin income statement
sales (1210*30.40)			36784
less: variable cost (1210*13.40)			16214
contribution margin			20570
less: fixed cost			14688
Income from operation			5882

2 at breakeven Total contribution margin will be equal to
fixed cost
therefore total contibution margin = 14688

3)Contribution margin per unit = contibution margin/sale
contribution margin per unit = 20570/1210 = 17
contribution margin ratio = contribution margin p.u/sale p.u
contribution margin ratio = 17/30.40 = 55.92%

4) Breakeven point = fixed cost/contribution margin p.u
breakeven point = 14688/17 = 864 unit

Breakeven sale revenue = fixed cost/contribution margin ratio
breakeven sale revenue = 14688/55.92% = 26266

5) target unit sale = (fixed cost+profit)/contribution unit
target unit sale = (14688+20000)/17
target unit sale = 2040 units

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Answer 2

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