The following costs result from the production and sale of 12,000 LEGO sets manufactured by LEGO Company for the year ended December 31. The LEGO sets sell for $20 each.

Required

1. Prepare a contribution margin income statement for the year.

2. Compute contribution margin per unit and contribution margin ratio.

Analysis Component

3. For each dollar of sales, how much is left to cover fixed costs and contribute to income?

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Variable costs Fixed costs Plastic for LEGO sets .... Wages of assembly workers .... Rent on factory.... Factory cleaning service..... $ 3,000 $ 6,750 30,000 4,520 Labeling .. 3,000 Factory machinery depreciation 20,000 Sales commissions... 6,000 Lease of office equipment.... 1,050 Office staff salaries... Administrative salaries. 15,000 120,000