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The following costs result from the production and sale of 4,350 drums manufactured by Tight Drums Company for the year ending December 31, 2017. The drums sell for $285 each. The company has an income tax rate of 40%. Variable production costs Plastic for casing Salaries of assembly workers. Drum stands Variable sales costs Sales commissions Fixed manufacturing costs factory taxes factory maintenance Depreciation of factory machinery Fixed sales and administration costs. Leasing of equipment for sales personnel. Accounting staff salaries. Administrative management salaries $ 104,400 387,150 143,550 95,700 13,500 27,000 87,000 27,000 77,000 157,000 Required: 1. Prepare an income statement of the company's contribution margin. 2. Calculate your contribution margin per unit and your contribution margin ratio.

The following costs result from the production and sale of 4,350 drums manufactured by Tight Drums Company for the year ending December 31, 2017. The drums sell for $285 each. The company has an income tax rate of 40%. Variable production costs Plastic for casing Salaries of assembly workers. Drum stands Variable sales costs Sales commissions Fixed manufacturing costs factory taxes factory maintenance Depreciation of factory machinery Fixed sales and administration costs. Leasing of equipment for sales personnel. Accounting staff salaries. Administrative management salaries $ 104,400 387,150 143,550 95,700 13,500 27,000 87,000 27,000 77,000 157,000 Required: 1. Prepare an income statement of the company's contribution margin. 2. Calculate your contribution margin per unit and your contribution margin ratio.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following costs result from the production and sale of 4,350 drums manufactured by Tight Drums Company for the year ending. December 31, 2017. The drums sell for $285 each. The company has an income tax rate of 40%. Variable production costs Plastic for casing Salaries of assembly workers. Drum stands Variable sales costs Sales commissions Fixed manufacturing costs factory taxes factory maintenance Depreciation of factory machinery Fixed sales and administration costs. Leasing of equipment for sales personnel. Accounting staff salaries. Administrative management salaries $ 104,400 387,150 143,550 95,700 13,500 27,000 87,000 27,000 77,000 157,000 Required: 1. Prepare an income statement of the company's contribution margin. 2. Calculate your contribution margin per unit and your contribution margin ratio.
Transcribed Image Text:The following costs result from the production and sale of 4,350 drums manufactured by Tight Drums Company for the year ending. December 31, 2017. The drums sell for $285 each. The company has an income tax rate of 40%. Variable production costs Plastic for casing Salaries of assembly workers. Drum stands Variable sales costs Sales commissions Fixed manufacturing costs factory taxes factory maintenance Depreciation of factory machinery Fixed sales and administration costs. Leasing of equipment for sales personnel. Accounting staff salaries. Administrative management salaries $ 104,400 387,150 143,550 95,700 13,500 27,000 87,000 27,000 77,000 157,000 Required: 1. Prepare an income statement of the company's contribution margin. 2. Calculate your contribution margin per unit and your contribution margin ratio.
Prepare an income statement of the company's contribution margin. TIGHT DRUMS COMPANY Contribution Margin Income Statement For the year ended December 31, 2017 Sales Variable costs: Total variable costs Contribution margin Fixed costs Total fixed costs Calculate your contribution margin per unit and your contribution margin ratio. (Relationship of contribution margin rounded to the nearest whole percentage). TIGHT DRUMS COMPANY Contribution margin income statement (partial) For the year ended December 31, 2017 Sales Variable costs: Total variable costs Contribution margin Per unit
Transcribed Image Text:Prepare an income statement of the company's contribution margin. TIGHT DRUMS COMPANY Contribution Margin Income Statement For the year ended December 31, 2017 Sales Variable costs: Total variable costs Contribution margin Fixed costs Total fixed costs Calculate your contribution margin per unit and your contribution margin ratio. (Relationship of contribution margin rounded to the nearest whole percentage). TIGHT DRUMS COMPANY Contribution margin income statement (partial) For the year ended December 31, 2017 Sales Variable costs: Total variable costs Contribution margin Per unit
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