The following costs result from the production and sale of 4,000 drum sets manufactured by Tight Drums Company for the year ended December 31, 2015. The drum sets sell for $250 each. The company has a 25% income tax rate.

Variable production costs

Plastic for casing

$

68,000

Wages of assembly workers

328,000

Drum stands

104,000

Variable selling costs

Sales commissions

60,000

Fixed manufacturing costs

Taxes on factory

10,000

Factory maintenance

20,000

Factory machinery depreciation

80,000

Fixed selling and administrative costs

Lease of equipment for sales staff

20,000

Accounting staff salaries

70,000

Administrative management salaries

150,000

Prepare a contribution margin income statement for the company.

TIGHT DRUMS COMPANY
Contribution Margin Income Statement
For Year Ended December 31, 2015
Sales
Variable costs:
Total variable costs
Contribution margin
Fixed costs
Total fixed costs

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, 2015
		Per Unit
Sales
Variable costs:
Total variable costs
Contribution margin