Business
Business, 21.07.2020 02:01, suselygonza

The following costs result from the production and sale of 4,500 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $300 each. The company has a 35% income tax rate. Variable production costs
Plastic for casing $121,500
Wages of assembly workers 414,000
Drum stands 162,000
Variable selling costs
Sales commissions 112,500
Fixed manufacturing costs
Taxes on factory 15,000
Factory maintenance 30,000
Factory machinery depreciation 90,000
Fixed selling and administrative costs
Lease of equipment for sales staff 30,000
Accounting staff salaries 80,000
Administrative management salaries 160,000
Required:
1. Prepare a contribution margin income statement for the year.
2. Compute its contribution margin per unit and its contribution margin ratio.
3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income?

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The following costs result from the production and sale of 4,500 drum sets manufactured by Tight Dru...

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