homework chapter22 (part 1) o Question 4 (of 9) 4. value 10.00 points The follow
ID: 2519755 • Letter: H
Question
homework chapter22 (part 1) o Question 4 (of 9) 4. value 10.00 points The following costs result from the production and sale of 4.650 drum sets manufactured by Vince Drum Company for the year ended December 31, 2011. The drum sets sell for $315 each. The company has a 30% income tax rate. Variable production costs Plastic for casing Wages of assembly workers Drum stands $139,500 441.750 181.350 Variable selling costs Sales commissions 130,200 Fixed manufacturing costs Taxes on factory Factory maintenance Factory machinery depreciation 8.500 17,000 77.000 Fixed selling and administrative costs Lease of equipment for sales staff Accounting staff salarles Acministrative management salaries 17.000 67,000 147.000Explanation / Answer
SOLUTION
(1)
VINCE DRUM COMPANY
Contribution margin Income Statement
For the year ended December 31, 2011
(2.1)
VINCE DRUM COMPANY
Contribution margin Income Statement
For the year ended December 31, 2011
(2.2) Contribution margin ratio = Contribution margin per unit / Sales * 100
= $123 / $315 * 100
= 39%
Amount ($) Amount ($) Sales (4,650 * $315) 1,464,750 Variable costs: Plastic for casing 139,500 Wages of assembly workers 441,750 Drum stands 181,350 Sales commissions 130,200 Total variable costs 892,800 Contribution margin 571,950 Fixed costs: Taxes on factory 8,500 Factory maintenance 17,000 Factory machinery depreciation 77,000 Lease of equipment for sales staff 17,000 Accounting staff salaries 67,000 Administrative management salaries 147,000 Total fixed costs 333,500 Pretax income 238,450 Income tax (30%) 71,535 Net income 166,915Related Questions
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