Problem 18-2A (Algo) Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 4,450 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $295 each. Variable costs Plastic for casing $ 115,700 Wages of assembly workers 404,950 Drum stands 155,750 Sales commissions 106,800 Fixed costs Taxes on factory 14,500 Factory maintenance 29,000 Factory machinery depreciation 89,000 Lease of equipment for sales staff 29,000 Accounting staff salaries 79,000 Administrative salaries 159,000 Required:

1.) Prepare a contribution margin income statement for the year.

2.) Compute contribution margin per unit and contribution margin ratio.

3.) For each dollar of sales, how much is left to cover fixed costs and contribute to income?