The following cost result from the production and sale and $1000 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 $17000
wages of assembly workers $82000
drum stands $26000
variable selling cost
sales commisitions $15.000
fixed manufacturing cost
taxes on factory $5000
factory maintenance $10.000
factory machinery depreciation $40.000
fixed selling and administrative cost
lease of equipment for sales staff $10.000
accountin staff salaries $35000
administrative managment 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.