Problem 18-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 4,400 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $290 each. The company has a 25% income tax rate. $110,000 396,000 149,600 101,200 Variable production costs Plastic for casing Wages of assembly workers Drum 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 Administrative management salaries 14,000 28, eee 88,888 28,eee 78,000 158,000 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 fixed costs and contribute to operating income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a contribution margin income statement for the year TIGHT DRUMS COMPANY Carbon Marine State Required 1 Required 2 Required Prepare a contribution margin income statement for the year. $ 1,276,000 TIGHT DRUMS COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales Variable costs Plastic for casing 110,000 Wages of assembly workers 396,000 Drum stands 149,600 655 600 519,200 Total variable costs Contribution margin Fixed costs Taxes on factory Factory maintenance Factory machinery depreciation 14.000 28,000 8 000 28.000 Lease of equipment for sales staff Accounting stall salaries Anistrative management salaries Tot feed costs 78,000 158.000 394.000 Pretax income 125 200 income tax Net income Required 2 > 3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 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 Variable costs: R Total variable costs Contribution margin 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 feed costs and contribute to operating income?
