Problem 18-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 5,000 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $350 each. The company has a 25% Income tax rate. $185,000 510,000 230,000 175,000 Variable production costs Plastic for casing Wages of assembly workers Drum stands Variable selling costs Sales commissions Fixed manufacturing costs Taxes on factory Factory maintenance Factory machinery depreciation Fixed selling and administrative costs Leass of equipment for sales staff Accounting staff salaries Administrative management salaries 5,000 10,000 70,000 10,000 60,000 140,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute its contribution margin per unit and its contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a contribution margin income statement for the year. TIGHT DRUMS COMPANY Contribution Margin Income Statement For Year Ended December 31, 2019 Sales Variable costs Total variable costs Contribution margin Fixed costs Total fixed costs Problem 18-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 5,000 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $350 each. The company has a 25% income tax rate. $185,000 510,000 230,000 175,000 Variable production costs Plastic for casing Wages of assembly workers Drum stands variable selling costs Sales commissions Fixed manufacturing costs Taxes on factory Factory maintenance Factory machinery depreciation Fixed selling and administrative costs Lease of equipment for sales staff Accounting staff salaries Administrative management salaries 5,000 10,000 70,000 10,000 60,000 140,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute its contribution margin per unit and its contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute its contribution margin per unit and its contribution margin ratio. (Round Contribution margin ratio to nearest whole percentage.) TIGHT DRUMS COMPANY Contribution Margin Income Statement (partial) For Year Ended December 31, 2019 Per Unit Sales Variable costs: Total variable costs Contribution margin Problem 18-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 5,000 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $350 each. The company has a 25% income tax rate. $185,000 510,000 230,000 175,000 Variable production costs Plastic for casing Wages of assembly workers Drum stands Variable selling costs Sales commissions Fixed manufacturing costs Taxes on factory Factory maintenance Factory machinery depreciation Fixed selling and administrative costs Lease of equipment for sales staff Accounting staff salaries Administrative management salaries 5,000 10,000 70,000 10,000 60,000 140,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute its contribution margin per unit and its contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For each dollar of sales, how much is left to cover fixed costs and contribute to operating income? (Round your answer to 2 decimal places.) For each dollar of sales, how much is left to cover fixed costs and contribute to operating income