Part Two Contribution Margin James and Jackie Simpson set up a company called Heavenly Sounds Incorporated. They provide music CDs around the Virginia Beach, Virginia area for various musical artist and aspiring musical artists. The company sold 12,000 CDs and they sell for $18 each for the year ended December 31. The tax rate is 21%.

Variable production costs Plastic for casing - $1,500 Wage of assembly workers - $30,000 Labeling - $3,000 Selling and Administrative-$6,000 Fixed manufacturing costs Rent on Factory - $6,750 Factory maintenance - $4,520 Factory machine depreciation - $20,000 Fixed selling and administrative costs Lease of equipment - $1,050 Accounting staff salaries - $15,000 Administrative management salaries - $120,000 Required: Please complete the following: 1. Compute the contribution margin. 2. Compute the contribution margin ratio. 3. Compute the break-even in sales units. 4. Compute the break-even in sales dollars. 5. Compute the margin of safety in units. 6. Prepare a contribution income statement for the year end. 7. Compute the unit sales required for a monthly after-tax profit of $50,000.