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The following costs result from the production and sale of 4,750 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $325 each. Variable costs Plastic for casing Wages of assembly workers Drum stands Sales commissions $ 152,000 460,750 194,750 142,500 Fixed costs Taxes on factory 7,500 Factory maintenance 15,000 Factory machinery depreciation 75,000 Lease of equipment for sales staff 15,000 Accounting staff salaries 65,000 Administrative salaries 145,000 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute contribution margin per unit and contribution margin ratio. Note: Round Contribution margin ratio to nearest whole percentage. Contribution margin per unit Contribution margin ratio % < Required 1 Required 3 >

The following costs result from the production and sale of 4,750 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $325 each. Variable costs Plastic for casing Wages of assembly workers Drum stands Sales commissions $ 152,000 460,750 194,750 142,500 Fixed costs Taxes on factory 7,500 Factory maintenance 15,000 Factory machinery depreciation 75,000 Lease of equipment for sales staff 15,000 Accounting staff salaries 65,000 Administrative salaries 145,000 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute contribution margin per unit and contribution margin ratio. Note: Round Contribution margin ratio to nearest whole percentage. Contribution margin per unit Contribution margin ratio % < Required 1 Required 3 >

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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The following costs result from the production and sale of 4,750 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $325 each. Variable costs Plastic for casing Wages of assembly workers Drum stands Sales commissions $ 152,000 460,750 194,750 142,500 Fixed costs Taxes on factory 7,500 Factory maintenance 15,000 Factory machinery depreciation 75,000 Lease of equipment for sales staff 15,000 Accounting staff salaries 65,000 Administrative salaries 145,000 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute contribution margin per unit and contribution margin ratio. Note: Round Contribution margin ratio to nearest whole percentage. Contribution margin per unit Contribution margin ratio % < Required 1 Required 3 >
Transcribed Image Text:The following costs result from the production and sale of 4,750 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $325 each. Variable costs Plastic for casing Wages of assembly workers Drum stands Sales commissions $ 152,000 460,750 194,750 142,500 Fixed costs Taxes on factory 7,500 Factory maintenance 15,000 Factory machinery depreciation 75,000 Lease of equipment for sales staff 15,000 Accounting staff salaries 65,000 Administrative salaries 145,000 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute contribution margin per unit and contribution margin ratio. Note: Round Contribution margin ratio to nearest whole percentage. Contribution margin per unit Contribution margin ratio % < Required 1 Required 3 >
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