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 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 $ 133, 400 432, 400 174, 800 124, 200 9,000 18,000 78,000 18,000 68,000 148,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute contribution margin per unit and contribution margin ratio.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

1 part 1

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
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
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?
$ 133,400
432, 400
174, 800
124, 200
Complete this question by entering your answers in the tabs below.
Sales
Variable costs:
9,000
18,000
78,000
18,000
68,000
148,000
Required 1 Required 2 Required 3
Prepare a contribution margin income statement for the year.
TIGHT DRUMS COMPANY
Contribution Margin Income Statement
For Year Ended December 31
Contribution margin
Fixed costs
Income
Transcribed Image Text: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 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 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? $ 133,400 432, 400 174, 800 124, 200 Complete this question by entering your answers in the tabs below. Sales Variable costs: 9,000 18,000 78,000 18,000 68,000 148,000 Required 1 Required 2 Required 3 Prepare a contribution margin income statement for the year. TIGHT DRUMS COMPANY Contribution Margin Income Statement For Year Ended December 31 Contribution margin Fixed costs 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
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
$ 133,400
432, 400
174, 800
124, 200
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?
9,000
18,000
78,000
18,000
68,000
148,000
Complete this question by entering your answers in the tabs below.
Sales
Variable costs:
Required 1 Required 2
Required 3
Compute contribution margin per unit and contribution margin ratio. (Round Contribution margin ratio to nearest whole
percentage.)
Total variable costs
Contribution margin
TIGHT DRUMS COMPANY
Contribution Margin Income Statement (partial)
For Year Ended December 31
Per Unit
Transcribed Image Text: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 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 $ 133,400 432, 400 174, 800 124, 200 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? 9,000 18,000 78,000 18,000 68,000 148,000 Complete this question by entering your answers in the tabs below. Sales Variable costs: Required 1 Required 2 Required 3 Compute contribution margin per unit and contribution margin ratio. (Round Contribution margin ratio to nearest whole percentage.) Total variable costs Contribution margin TIGHT DRUMS COMPANY Contribution Margin Income Statement (partial) For Year Ended December 31 Per Unit
Expert Solution
Step 1

Contribution margin is calculated as the difference between the sales value and the variable cost .

preparation of contribution margin income statement are as follows. As per your requirement answer for part 1 are solved below

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education