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Head-First Company plans to sell 4,400 bicycle helmets at $78 each in the coming year. Variable cost is 60% of the sales price; contribution margin
Head-First Company plans to sell 4,400 bicycle helmets at $78 each in the coming year. Variable cost is 60% of the sales price; contribution margin is 40% of the sales price. Total fixed cost equals $50,300 (includes fixed factory overhead and fixed selling and administrative expense).
Required: | |
1. | Calculate the sales revenue that Head-First must make to earn operating income of $93,220 by using the point in sales equation. |
2. | Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1. |
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