Prepare a contribution margin income statement for company

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Question - The following costs result from the production and sale of 4,050 drum sets manufactured by Vince Drum Company for the year ended December 31, 2011. The drum sets sell for $255 each. The company has a 30% income tax rate.

Variable production costs


Plastic for casing

$72,900

Wages of assembly workers

336,150

Drum stands

109,350

Variable selling costs


Sales commissions

64,800

Fixed manufacturing costs


Taxes on factory

10,500

Factory maintenance

21,000

Factory machinery depreciation

81,000

Fixed selling and administrative costs


Lease of equipment for sales staff

21,000

Accounting staff salaries

71,000

Administrative management salaries

151,000

Required:

Prepare a contribution margin income statement for the company.

Compute its contribution margin per unit.

Compute its contribution margin ratio.

Reference no: EM131815793

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