Problem 18-1A Contribution margin income statement and contribution margin ratio LO A1 The following costs result from the production and sale of 4,850 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $335 each. The company has a 30% income tax rate. $164,900 480,150 208,550 155,200 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 6,500 13,000 73,000 13,000 63,000 143,000 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? 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 Required 1 Required 2 Required 3 Compute its contribution margin per unit and its contribution margin ratio. (Round Contribution margir 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 Required 1 Required 3 >