The following costs result from the production and sale of 4,200 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $270 each. The company has a 25% income tax rate.
Variable production costs
Plastic for casing $ 88,200
Wages of assembly workers 361,200
Drum stands 126,000
Variable selling costs
Sales commissions 79,800
Fixed manufacturing costs
Taxes on factory 12,000
Factory maintenance 24,000
Factory machinery depreciation 84,000
Fixed selling and administrative costs
Lease of equipment for sales staff 24,000
Accounting staff salaries 74,000
Administrative management salaries 154,000
Prepare a contribution margin income statement for the company.
Compute its contribution margin per unit and its contribution margin ratio
Answers: 3
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The following costs result from the production and sale of 4,200 drum sets manufactured by Tight Dru...
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