Contribution margin per unit and contribution margin ratio

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Reference no: EM131261477

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 $ 17,000 Wages of assembly workers 82,000 Drum stands 26,000 Variable selling costs Sales commissions 15,000 Fixed manufacturing costs Taxes on factory 5,000 Factory maintenance 10,000 Factory machinery depreciation 40,000 Fixed selling and administrative costs Lease of equipment for sales staff 10,000 Accounting staff salaries 35,000 Administrative management salaries 125,000 Required: 1. Prepare a contribution margin income statement for the company. 2. Compute its contribution margin per unit and its contribution margin ratio.

Reference no: EM131261477

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