Head$-$First Company plans to sell $5,000$ bicycle helmets at $$70$ each in the coming year. Unit variable

cost is $$49($includes direct materials, direct labour, variable overhead, and variable selling expense$).$

Total fixed cost equals $$29,400($includes fixed factory overhead and fixed selling and administrative

expense$).$

Requirements:

$1.$ Calculate the number of helmets Head$-$First must sell to earn operating income of $$81,900$ before

income taxes $($ie$,$ ignore income taxes$).$

$2.$ Calculate the sales revenue that Head$-$First must make to earn operating income of $$81,900$

before income taxes $($ie$,$ ignore income taxes$).$

$3.($a$)$ Calculate the margin of safety in terms of the number of units at $5,000$ units sold.

$($b$)$ Calculate the margin of safety in terms of sales revenue at $5,000$ units sold.

$4.$ For Head$-$First Company, operating income at $5,000$ units sold is $$75,600.$ Calculate the degree of

operating leverage at this level of sales. $($Round your answer to the nearest tenth.