Contribution Margin Income Statement
Not what you're looking for?
The following costs result from the production and sale of 4,000 drum sets manufactured by Vince Drum Company for the year ended December 31, 2011. The drum sets sell for $250 each. The company has a 25% income tax rate.
Variable production costs
Plastic for casing............................................$68,000
Wages of assembly workers...............................328,000
Drum stands.................................................104,000
Variable sellings costs
Sales commissions...........................................60,000
Fixed manufacturing costs
Taxes on factory.............................................10,000
Factory maintenance.........................................20,000
Factory machinery depreciation.....................................80,000.
Fixed selling administrative costs
Lease of equipment for sales staff........................ 20,000
Accounting staff salaries.....................................70,000
Administrative management salaries......................150,000
1. Prepare a contribution margin income statement for the company.
2. Compute its contribution margin and contribution margin ratio.
3. Interpret the contribution margin ratio from part 2.
Purchase this Solution
Solution Summary
Contribution margin income statements are examined. Variable production costs are given.
Purchase this Solution
Free BrainMass Quizzes
Motivation
This tests some key elements of major motivation theories.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.