Instructions

Head-First Company plans to sell 5,800 bicycle helmets at $76 each in the coming year. Variable cost is 59% of the sales price; contribution margin is 41% of the sales price. Total fixed cost equals $49,600 (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 $78,156 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.