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. Variable production costs Plastic for casing $ 17,000Wages of assembly workers 82,000Drum stands 26,000Variable selling costs Sales commissions 15,000Fixed manufacturing costs Taxes on factory 5,000Factory maintenance 10,000Factory machinery depreciation 40,000Fixed selling and administrative costs Lease of equipment for sales staff 10,000Accounting staff salaries 35,000Administrative management salaries 125,000Compute its contribution margin per unit and its contribution margin ratio. Prepare a contribution margin income statement. Interpret the contribution margin and contrubition margin ratio.
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Home » Business » 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.