Problem 18-2A (Static) Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 1,000 drum sets manufactured by Tight Drums Company for the year en December 31. The drum sets sell for $500 each. Variable costs Plastic for casing. Wages of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory Factory maintenance. Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative salaries $ 17,000 82,000 26,000 15,000 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 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?

Problem 18-2A (Static) Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 1,000 drum sets manufactured by Tight Drums Company for the year en December 31. The drum sets sell for $500 each. Variable costs Plastic for casing. Wages of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory Factory maintenance. Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative salaries $ 17,000 82,000 26,000 15,000 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 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?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1PB: A company sells mulch by the cubic yard. Grade A much sells for $150 per cubic yard and has variable...

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