UNITS TO EARN TARGET INCOME Head-First Company plans to sell 5,000 bicycle helmets at $70 each in

Question:

UNITS TO EARN TARGET INCOME Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year.

Unit variable cost is $49 (includes direct materials, direct labor, variable overhead, and variable selling expense). Total fixed cost equals $29,400 (includes fixed factory overhead and fixed selling and administrative expense).

Required:

. Calculate the number of helmets Head-First must sell to earn operating income of

$81,900.

. Check your answer by preparing a contribution margin income statement based on the number of units calculated.

Cornerstone Exercise

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Cornerstones Of Financial Accounting Current Trends Update

ISBN: 9781111527952

1st Edition

Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen

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