Business, 12.03.2020 19:34 babysune01

The following costs result from the production and sale of 4,800 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $330 each. The company has a 25% income tax rate.

Variable production costs
Plastic for casing $ 158,400
Wages of assembly workers 470,400
Drum stands 201,600
Variable selling costs
Sales commissions 148,800
Fixed manufacturing costs
Taxes on factory 7,000
Factory maintenance 14,000
Factory machinery depreciation 74,000
Fixed selling and administrative costs
Lease of equipment for sales staff 14,000
Accounting staff salaries 64,000
Administrative management salaries 144,000

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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The following costs result from the production and sale of 4,800 drum sets manufactured by Tight Dru...

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