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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

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 compute 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. Compute a contribution income statement for the year end.
7. Compute the unit sales required for a monthly after-tax profit of $50,000.

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