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The following information applies to the questions displayed below.) Morning Dove Company manufactures one model of birdbath,
The following information applies to the questions displayed below! Morning Dove Company manufactures one model of birdbath,
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Answer #1
1
Sales price per unit - Variable cost per unit = Unit Contribution margin
25.00 19.50 5.50 per birdbath
Unit Contribution margin / or ÷ Sales price per unit = Contribution margin ratio
5.50 25.00 22%
2
Contribution margin Income Statement
Sales revenue 35000 =1400*25
Variable costs 27300 =1400*19.50
Contribution margin 7700
Fixed costs 4180
Net operating income 3520
Workings:
Direct materials 3.00 =1500/500
Direct labor 15.00 =7500/500
Utilities 1.10 =(650-100)/500
Maintenance 0.40 =(480-280)/500
Variable cost per unit 19.50
Utilities 100
Supervisor's salary 3000
Maintenance 280
Depreciation 800
Fixed costs 4180
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