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Problem 18-2A (Static) Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 1,000 drum sets manufactured by Tight Drums Company for the year en December 31. The drum sets sell for $500 each. Variable costs Plastic for casing. Wages of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory Factory maintenance. Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative salaries $ 17,000 82,000 26,000 15,000 5,000 10,000 40,000 10,000 35,000 125,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute contribution margin per unit and contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to income?

Problem 18-2A (Static) Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 1,000 drum sets manufactured by Tight Drums Company for the year en December 31. The drum sets sell for $500 each. Variable costs Plastic for casing. Wages of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory Factory maintenance. Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative salaries $ 17,000 82,000 26,000 15,000 5,000 10,000 40,000 10,000 35,000 125,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute contribution margin per unit and contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to income?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 18-2A (Static) Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 1,000 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $500 each. Variable costs Plastic for casing Wages of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory Factory maintenance Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative salaries $ 17,000 82,000 26,000 15,000 5,000 10,000 40,000 10,000 35,000 125,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute contribution margin per unit and contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to income? Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Prepare a contribution margin income statement for the year.
Transcribed Image Text:Problem 18-2A (Static) Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 1,000 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $500 each. Variable costs Plastic for casing Wages of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory Factory maintenance Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative salaries $ 17,000 82,000 26,000 15,000 5,000 10,000 40,000 10,000 35,000 125,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute contribution margin per unit and contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to income? Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Prepare a contribution margin income statement for the year.
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