Question
Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Product costs include: Direct materials per helmet $ 30 Direct
Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Product costs include:
| Direct materials per helmet | $ 30 |
| Direct labor per helmet | 8 |
| Variable factory overhead per helmet | 4 |
| Total fixed factory overhead | 20,000 |
Variable selling expense is a commission of $3 per helmet; fixed selling and administrative expense totals $29,500.
| Required: | ||
|---|---|---|
| 1. | Calculate the total variable cost per unit. | |
| 2. | Prepare a contribution margin income statement for Head - First coming for the coming year. Refer to the list of Amount Descriptions for the exact wording of text items within the income statement. | |
| Amount Descriptions | ||
| Operating income | ||
| Operating loss | ||
| Sales | ||
| Total contribution margin | ||
| Total fixed cost | ||
| Total variable cost | ||
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
