Handy Home sells windows and doors in the ratio of 7:3 (windows:doors). The selling price of each window is $109 and of each door is $259. The variable cost of a window is $67.00 and of a door is $179.50. Fixed costs are $772,125. (Enter your "per unit" values in two decimal places.) (1) Determine the selling price per composite unit. Quantity Selling Price per unit Total per composite unit Windows Doors (2) Determine the variable costs per composite unit. Quantity Windows Variable costs per unit Total per composite unit Doors Contribution margin per composite unit $ 0.00 0.00 Contribution margin (3) Determine the break-even point in composite units. Choose Numerator: 1 Choose Denominator: Break Even Units Break even units (4) Determine the number of units of each product that will be sold at the break-even point. Quantity Number of composite units to break even. Unit sales at break-even point Windows Doors Total Problem 18-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 4,350 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $285 each. The company has a 40% income tax rate. Variable production costs Plastic for casing $104,400 Wages of assembly workers 387,150 Drum stands 143,550 Variable selling costs Sales commissions 95,700 Fixed manufacturing costs Taxes on factory 13,500 Factory maintenance 27,000 Factory machinery depreciation 87,000 Fixed selling and administrative costs Lease of equipment for sales 27,000 staff Accounting staff salaries 77,000 Administrative management 157,000 salaries Required: 1. Prepare a contribution margin income statement for the year. 2. Compute its contribution margin per unit and its contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? Required Required Required 1 2 3 Prepare a contribution margin income statement for the year. TIGHT DRUMS COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales Variable costs: Total variable costs Contribution margin Fixed costs Total fixed costs Required Required Required 1 2 3 Compute its contribution margin per unit and its contribution margin ratio. (Round Contribution margin ratio to nearest whole percentage.) TIGHT DRUMS COMPANY Contribution Margin Income Statement (partial) For Year Ended December 31, 2019 Per Unit Sales Variable costs: Total variable costs Contribution margin 1 Required Required Required 2 3 For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? (Round your answer to 2 decimal places.) For each dollar of sales, how much is left to cover fixed costs and contribute to operating income?
