The following costs result from the production and sale of 4,500 drum sets manufactured by Tom Thompson Company for the year ended December 31, 2013. The drum sets sell for $300 each. The company has a 35% income tax rate.
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Variable production costs
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Plastic for casing
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$
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121,500
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Wages of assembly workers
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414,000
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Drum stands
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162,000
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Variable selling costs
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Sales commissions
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112,500
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Fixed manufacturing costs
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Taxes on factory
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15,000
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Factory maintenance
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30,000
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Factory machinery depreciation
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90,000
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Fixed selling and administrative costs
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Lease of equipment for sales staff
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30,000
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Accounting staff salaries
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80,000
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Administrative management salaries
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160,000
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1. Prepare a contribution margin income statement for the company.
2. Compute its contribution margin per unit.