The following costs result from the production and sale of 4,300 drum sets manufactured by...
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Accounting
The following costs result from the production and sale of 4,300 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $280 each. The company has a 35% income tax rate.
Variable production costs
Plastic for casing
$
98,900
Wages of assembly workers
378,400
Drum stands
137,600
Variable selling costs
Sales commissions
90,300
Fixed manufacturing costs
Taxes on factory
13,000
Factory maintenance
26,000
Factory machinery depreciation
86,000
Fixed selling and administrative costs
Lease of equipment for sales staff
26,000
Accounting staff salaries
76,000
Administrative management salaries
156,000
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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