Hawk Homes, Inc., makes one type of birdhouse that it sells for $31.00 each. ts

Question

Hawk Homes, Inc., makes one type of birdhouse that it sells for $31.00 each. ts variable cost is $14.70 par house, and its fixad costs total $14,034.30 per year. Hawk currently has tha capacity to produce up to 2.800 birdhouses per year, so its relevant range is Oto 2.800 houses Required: 1. Prepare a contibution margin income statement for Hawk assuming it sells 1,290 birdhouses this year. (Enter your answers rounded to 2 decimal places.) Income from 2. wimout any calculations, determine Havak's total contribution margin I the company breaks even (Enter your answers rounded to 2 decimal places.) 3. Calculate Hawks contribuon margin per unit and its contribution margin ratio. (Round your answers to 2 decimal places. (Le. .1234 should be entered as 12.34%.? Margin Contribution Ratio 4. Celculate Hawk's breek-even point in number of uniks and in sales revenue. (Round your Sales Revenue" answer to 2 decimal places and "Unit answer to the nearest whole number.) Units Break-Even Sales Revenue 5. Suppose Hawk wants to eam $25.000 this year. Determine how many birdhouses i must sell to generate this amount of prot. (Round up to the next whole number) Units

Explanation / Answer

given data

sales $ 31 each

variable cost = $14.70

fixed cost =$ 14034.3

capacity to produce = 2800 per year

sales 1290 birdhouses

1) calculation of contribution margin income statement :

2) calculation of contribution margin if the company break even :

at the break even total contribution = total fixed cost

= $ 14034.3

3) calculate contribution margin per unit and contribution margin ratio :

= 31 - 14.70

= 16.3

= (16.3 / 31) * 100

= 52.58%

4) calculate break even point in unit and revenue :

= 14034.3 / 16.3

= 861 units

= 861 * 31

= 26691

(or)

= (14034.3 * 100) / 52.58

= 26691

5) suppose hanks want to earn $ 25000 this year, determine the how many birdhouses is must be sell :

= (14034.3 + 25000) / 16.3

= 2395 units

= 2395 * 31

= $ 74245

particulars amount sales (1290 * 31) 39990 less: variable cost (1290 * 14.7) (18963) contribution (sales - variable cost) 21027 less : fixed cost (14034.3) income from operation (contribution - fixed cost) 6992.7

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