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

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Accounting

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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