Answer:
Instructions are listed below
Explanation:
Giving the following information:
The following costs result from the production and sale of 4,900 drum sets manufactured. The drum sets sell for $340 each.
Variable production costs:
Plastic for casing $ 171,500
Wages of assembly workers 490,000
Drum stands 215,600
Variable selling costs Sales commissions 161,700
Total= $1,038,800
Fixed manufacturing costs:
Taxes on factory 6,000
Factory maintenance 12,000
Factory machinery depreciation 72,000
Total= 90,000
Fixed selling and administrative costs:
Lease of equipment for sales staff 12,000
Accounting staff salaries 62,000
Administrative management salaries 142,000
Total= 216,000
The company has a 35% income tax rate.
Contribution format income statement:
Revenues= 4900*340= 1,666,000
Variable costs= 1,038,800 (-)
Contribution margin= 627,200
Fixed manufacturing costs= 90,000 (-)
Fixed selling and administrative costs= 216,000 (-)
Net operating income= 321,200
Tax= 112,420 (-)
Net income= $208,780
