Question
Head-First Company plans to sell 5,800 bicycle helmets at $67 each in the coming year. Variable cost is 54% of the sales price; contribution margin
Head-First Company plans to sell 5,800 bicycle helmets at $67 each in the coming year. Variable cost is 54% of the sales price; contribution margin is 46% of the sales price. Total fixed cost equals $56,235 (includes fixed factory overhead and fixed selling and administrative expense).
Required:
1.Calculate the sales revenue that Head-First must make to break even by using the break-even point in sales equation.
2.Check your answer by preparing a contribution margin income statement based on the break-even point in sales dollars.
3.Calculate the sales revenue that Head First must make to break even by using the break even point in sales equation.
4.Check your answer by preparing a contribution margin income statement based on the break even point in sales dollars.
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