Question
Head-First Company plans to sell 4,400 bicycle helmets at $78 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor,
Head-First Company plans to sell 4,400 bicycle helmets at $78 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $50,300 (includes fixed factory overhead and fixed selling and administrative expense).
Refer to the list below for the exact wording of text items within your income statement.
Amount Descriptions | |
Operating income | |
Operating loss | |
Sales | |
Total contribution margin | |
Total fixed expense | |
Total variable expense |
1. Calculate the number of helmets Head-First must sell to earn operating income of $94,900.
helmets:
2. Check your answer by preparing a contribution margin income statement based on the number of units calculated. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement.
Head-First Company |
Contribution Margin Income Statement |
Based on Helmets Sold |
1 | Sales | |
2 | Total Revenue Expense | |
3 | Total Contribution margin | |
4 | Total fixed expense 50,300 | |
5 |
|
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