O ezto.mheducat tpx Hawk Homes, Inc, makes one type of birdhouse that it sells f

Question

O ezto.mheducat tpx Hawk Homes, Inc, makes one type of birdhouse that it sells for $30.10 each Its variable cost is $14.10 per house, and its fixed costs total $13.968 00 per year Haak currenty has the capacity produce up to 2,900 birdhouses per year, so its relevant range is 0 to 2,900 houses Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,300 birdhouses this year. (Enter your answers rounded to 2 decimal places) Contribution Margin Income S Contribution Margin income from Operations 2. without any calcutations, determine Hawks total contibution margin it the company breaks even (Enter your answers rounded to 2 decimal places.) ould be entered as 12.34%.)) 3. Calculate margin ratio (Round your answers to 2 decimal places. (i.e. 1234 sh Hawk's contribution margin per unt and its contribution ) Type here to search

Explanation / Answer

1.

HAWK HOMES, INC.

Contribution margin Income Statement

2.

At breakeven contribution margin = Fixed costs

Total contribution margin = 13,968

3.

4.

5.

Target unit sales = (fixed costs+desired profit) / unit contribution margin

= (13,968+ 21,000) / 16

= 2,186

Sales (1,300*30.10) 39,130 Variable costs (1,300*14.10) 18,330 Contribution margin 20,800 Fixed costs 13,968 Operating income 6,832

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