Question

Hawk Homes, Incorporated makes one type of birdhouse that it selis for $30.00 each. Its variable cost is $13.50 per house, andits fixed costs total $14,42100 per year. Hawk currently has the capacity to produce up to 2,900 birchouses per year, so its relevant range: is 0 to 2,900 houses. Required: Prepare a contribution margin incame statement for Hawk assuming it sells 1,180 birchouses this year:

Answer 1

To prepare a contribution margin income statement for Hawk Homes, Incorporated, we need to calculate the total revenue, total variable cost, and contribution margin. Based on the given information, the total revenue is $35,400, total variable cost is $15,930, and the contribution margin is $19,470.

Step-by-step explanation:

To prepare a contribution margin income statement for Hawk Homes, Incorporated, we need to calculate the total revenue, total variable cost, and contribution margin. First, we calculate the total revenue by multiplying the selling price per birdhouse ($30) by the number of birdhouses sold (1,180). This gives us a total revenue of $35,400.

Next, we calculate the total variable cost by multiplying the variable cost per birdhouse ($13.50) by the number of birdhouses sold (1,180). This gives us a total variable cost of $15,930.

The contribution margin is calculated by subtracting the total variable cost from the total revenue. In this case, the contribution margin is $35,400 - $15,930 = $19,470.

Using this information, we can prepare a contribution margin income statement for Hawk Homes, Incorporated:

Description Amount

Total Revenue $35,400

Total Variable Cost $15,930

Contribution Margin $19,470

Fixed Costs $14,42100

Net Income $5580