Refer to the information for Morning Dove Company in E5-2. Suppose it sells each birdbath for $25.

Production Costs ...Total Cost

Direct materials .....$1,500

Direct labor ..... 7,500

Utilities ($100 fixed) ... 650

Supervisor’s salary ... 3,000

Maintenance ($280 fixed) . 480

Depreciation ...... 800

Required:

1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold.

2. Prepare a contribution margin income statement assuming that Morning Dove produces and sells 1,400 units.