Item $2$

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Item $2$

Hawk Homes, Incorporated makes one type of birdhouse that it sells for $$29\mathrm{.}50$ each. Its variable cost is $$13\mathrm{.}80$ per house, and its fixed costs total $$13,454\mathrm{.}90$ per year. Hawk currently has the capacity to produce up to $2,900$ birdhouses per year, so its relevant range is $0$ to $2,900$ houses.

Required:

Prepare a contribution margin income statement for Hawk assuming it sells $1,250$ birdhouses this year.

Without any calculations, determine Hawk$$s total contribution margin if the company breaks even.

Calculate Hawk$$s contribution margin per unit and its contribution margin ratio.

Calculate Hawk$$s break$-$even point in number of units and in sales revenue.

Suppose Hawk wants to earn $$25,000$ this year. Determine how many birdhouses it must sell to generate this amount of profit.