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Problem 05-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 4,650 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $315 each. The company has a 30% income tax rate. $ 139.500 441,750 181. se 130.29 Variable production costs Plastic for casing Wages of assembly workers Drus stands Variable selling costs Sales commissions Fixed manufacturing costs Taxes on factory Factory maintenance Factory machinery depreciation Fixed selling and administrative costs Lease of equipment for sales staff Accounting staff salaries Adsinistrative management salaries 3,500 17.000 77,000 17.000 67.00 147.000 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 foxed costs and contribute to operating income? 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, 2019 Sales 1.464 750.000 Variable costs Plastic for casing Wages of assembly workers Drum stands Sales commissions 139,500,000 441,750,000 181,350,000 130,200,000 892,800,000 571,950,000 Total variable costs Contribution margin Fixed costs Taxes on factory Factory maintenance Factory machinery depreciation 8.500.000 17,000,000 77,000,000 Sales COMISSIONS UUU 892,800,000 571,950,000 Total variable costs Contribution margin Fixed costs Taxes on factory Factory maintenance Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative management salaries 8,500,000 X 17.000.000 77,000,000 17,000,000 67,000,000 147.000.000 Total fixed costs Pretax income Income tax Net income 333,500,000 238,450,000 $ 71,535,000 $ 166,915,000 $ Required 2 > TIGHT DRUMS COMPANY Contribution Margin Income Statement (partial) For Year Ended December 31, 2019 Per Unit Sales Variable costs: Total variable costs Contribution margin 123 Contribution Margin Ratio 100% Sales Variable costs Contribution margin $ 123 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? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 . Required 2 Required 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? 671.950.00
