The following costs result from the production and sale of 4, 600 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $310 each Variable costs Plastic for casing 133,400 Wages of assembly workers 432, 400Drum stands 174,800 Sales commissions 124, 200 Fixed costs Taxes on factory 9,000Factory maintenance 18,000 Factory machinery depreciation 78,000 Lease of equipment for sales staff 18,000 Accounting staff salaries 68, 000Administrative salaries 148, 000Required: Prepare a contribution margin income statement for the year. Compute contribution margin per unit and contribution margin ratio. For each dollar of sales, how much is left to cover fixed costs and contribute to income?

The following costs result from the production and sale of 4, 600 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $310 each Variable costs Plastic for casing 133,400 Wages of assembly workers 432, 400Drum stands 174,800 Sales commissions 124, 200 Fixed costs Taxes on factory 9,000Factory maintenance 18,000 Factory machinery depreciation 78,000 Lease of equipment for sales staff 18,000 Accounting staff salaries 68, 000Administrative salaries 148, 000Required: Prepare a contribution margin income statement for the year. Compute contribution margin per unit and contribution margin ratio. For each dollar of sales, how much is left to cover fixed costs and contribute to income?

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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