Head-First Company plans to sell 4,400 bicycle helmets at $78 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $50,300 (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 $94,900. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated.
Head-First Company plans to sell 4,400 bicycle helmets at $78 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $50,300 (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 $94,900. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Head-First Company plans to sell 4,400 bicycle helmets at $78 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead , and variable selling expense). Total fixed cost equals $50,300 (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 $94,900. |
| 2. | Check your answer by preparing a contribution margin income statement based on the number of units calculated. |
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