The following costs result from the production and sale of 4,850 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $335 each. The company has a 30% income tax rate.

Variable production costs
Plastic for casing	$	164,900
Wages of assembly workers		480,150
Drum stands		208,550
Variable selling costs
Sales commissions		155,200
Fixed manufacturing costs
Taxes on factory		6,500
Factory maintenance		13,000
Factory machinery depreciation		73,000
Fixed selling and administrative costs
Lease of equipment for sales staff		13,000
Accounting staff salaries		63,000
Administrative management salaries		143,000

Required:

1. Prepare a contribution margin income statement for the company. COMPLETE AND CORRECT!!! 2. Compute its contribution margin per unit and its contribution margin ratio. NEED HELP!!!!

Complete this question by entering your answers in the tabs below.

Required 1

Required 2

Prepare a contribution margin income statement for the company.

TIGHT DRUMS COMPANY
Contribution Margin Income Statement
For Year Ended December 31, 2017
Sales		$1,624,750
Variable costs:
Plastic for casing	164,900
Wages of assembly workers	480,150
Drum stands	208,550
Sales commissions	155,200
Total variable costs		1,008,800
Contribution margin		615,950
Fixed costs
Taxes on factory	6,500
Factory maintenance	13,000
Factory machinery depreciation	73,000
Lease of equipment for sales staff	13,000
Accounting staff salaries	63,000
Administrative management salaries	143,000
Total fixed costs		311,500
Pretax income		304,450
Income tax		91,335
Net income		$213,115

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, 2017
		Per Unit
Sales
Variable costs:
Plastic for casing
Wages of assembly workers
Drum stands
Sales commissions
Total variable costs
Contribution margin