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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, 2019. The drum sets sell for $500 each. The company has a 25% income tax rate, $ 17,000 82,000 26,000 15,000 Variable production costs Plastic for casing Wages of assembly workers Drum stands Variable selling costs Sales commissions Fixed manufacturing costs Taxes on factory Factory maintenance Factory machinery depreciation Fixed selling and administrative costs Lease of equipment for sales staff Accounting staff salaries Administrative management salaries 5,000 10,000 40,000 10,000 35,000 125,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute its contribution margin per unit and its contribution margin ratio 3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a contribution margin income statement for the year. Required 1 Required 2 Required 3 Prepare a contribution margin income statement for the year. TIGHT DRUMS COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales 500,000 Variable costs: Plastic for casing Wages of assembly workers Drum stands Sales commissions 17,000 82,000 26,000 15,000 140,000 360,000 Total variable costs Contribution margin Fixed costs Taxes on factory Factory maintenance Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative management salaries 5,000 10,000 40,000 10,000 35,000 125,000 225,000 135,000 Total fixed costs Pretax income Income tax 33,750 101,250 Net income Required 1 Required 2 Required 3 Compute its contribution margin per unit and its contribution margin ratio. TIGHT DRUMS COMPANY Contribution Margin Income Statement (partial) For Year Ended December 31, 2019 Per Unit $ $ 500 $ 17 Sales Variable costs: Plastic for casing Wages of assembly workers Drum stands Sales commissions 82 26 15 140 Total variable costs Contribution margin $ 360 Contribution Margin Ratio Sales $ 500 100% Variable costs 140 Contribution margin $ 360 72% $ 17,000 82,000 26,000 15,000 Variable production costs Plastic for casing Wages of assembly workers Drum stands Variable selling costs Sales commissions Fixed manufacturing costs Taxes on factory Factory maintenance Factory machinery depreciation Fixed selling and administrative costs Lease of equipment for sales staff Accounting staff salaries Administrative management salaries 5,000 10,000 40, eee le.eee 35,000 125,000 Required: 1. Prepare a contribution margin income statement for the year, 2. Compute its contribution margin per unit and its contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? (Round your answer to 2 decimal places.) For each dollar of sales, how much is left to cover fixed costs and contribute to operating income
