Units to Earn Target Income Head-First Company plans to sell 5,000 bicycle helmets at $68 each in the coming year. Unit variable cost is $46 (includes direct materials, direct labour, variable factory overhead, and variable selling expense). Total fixed cost equals $35,572 (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 $58,038. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated. Head-First Company Contribution Margin Income Statement Based on number of units calculated in part 1.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Units to Earn Target Income Head-First Company plans to sell 5,000 bicycle helmets at $68 each in the coming year. Unit variable cost is $46 (includes direct materials, direct labour, variable factory overhead, and variable selling expense). Total fixed cost equals $35,572 (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 $58,038.

2. Check your answer by preparing a contribution margin income statement based on the number of units calculated. Head-First Company Contribution Margin Income Statement Based on number of units calculated in part 1.

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