The following costs result from the production and sale of 4,050 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $255 each.

Variable costs
Plastic for casing	$ 72,900
Wages of assembly workers	336,150
Drum stands	109,350
Sales commissions	64,800
Fixed costs
Taxes on factory	10,500
Factory maintenance	21,000
Factory machinery depreciation	81,000
Lease of equipment for sales staff	21,000
Accounting staff salaries	71,000
Administrative salaries	151,000

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?

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

Required 1

Required 2

Required 3

Compute contribution margin per unit and contribution margin ratio. (Round Contribution margin ratio to nearest whole percentage.)

TIGHT DRUMS COMPANY
Contribution Margin Income Statement (partial)
For Year Ended December 31
		Per Unit
Sales
Variable costs:
Drum stands
Plastic for casing
Sales commissions
Wages of assembly workers
Total variable costs
Contribution margin		$111
Contribution Margin Ratio
Sales		100%
Variable costs
Contribution margin	$111