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The following costs result from the production and sale of 4,950 drum sets manufactured by Tight...

The following costs result from the production and sale of 4,950 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $345 each. The company has a 40% income tax rate.
  
            
Variable production costs           
Plastic for casing   $   178,200     
Wages of assembly workers      499,950     
Drum stands      222,750     
Variable selling costs           
Sales commissions      168,300     
Fixed manufacturing costs           
Taxes on factory      5,500     
Factory maintenance      11,000     
Factory machinery depreciation      71,000     
Fixed selling and administrative costs           
Lease of equipment for sales staff      11,000     
Accounting staff salaries      61,000     
Administrative management salaries      141,000     


Required:
1. Prepare a contribution margin income statement for the company.
2. Compute its contribution margin per unit and its contribution margin ratio.

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ekkarill92 answered 2 years ago
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