Units to Earn Target Income

Head-First Company plans to sell 5,100 bicycle helmets at $72 each in the coming year. Unit variable cost is $47 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $50,000 (includes fixed factory overhead and fixed selling and administrative expense).

Required:

1. Calculate the number of helmets Head-First must sell to earn operating income of $60,500.

2. Check your answer by preparing a contribution margin income statement based on the number of units calculated.