The following costs result from the production and sale of $1,000$ drum sets manufactured by Tight Drums Company for the year ended December $31,2015.$ The drum sets sell for $$500$ each. The company has a $25\%$ income tax rate.

PROBLEM SET A

Problem $21-1$A Contribution margin income statement and contribution margin ratio A$1$

Required

Prepare a contribution margin income statement for the company.

Check $(1)$ Net income,

Compute its contribution margin per unit and its contribution margin ratio. $$101,250$

Analysis Component

$3.$ Interpret the contribution margin and contribution margin ratio from part $2.$