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.

6.  Atlantic Manufacturing produces and sells children’s bikes at an average price of $80. Its costs are as follows: direct materials = $14; direct labour = $8; variable overhead = $3; sales commission is 10% of price. Its fixed monthly costs are $42,000.   Required: 1. Using the above cost data, set up a monthly cost equation.  2. What is the company’s contribution margin percentage? (Round your answer to 2 decimal places.)

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Use the 5-Step Decision Making Process to evaluate the following decision: St. Augustine Bicycles has been manufacturing its own wheels for its bikes.  The company is currently operating at 100% capacity, and variable manufacturing overhead is charged to production at the rate of 30% of direct labor cost.  The direct materials and direct labor cost per unit to make the wheels are $3.00 and $3.60 respectively.  Normal production is 200,000 wheels per year. A supplier offers to make the wheels at a price of $8 each.  If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $84,000 of fixed manufacturing overhead currently being charged to the wheels will have to be absorbed by other products. Prepare an incremental analysis for the decision to make or buy the wheels. Should St. Augustine Bicycles buy the wheels from the outside supplier?  Clearly identify and label each step. Justify your answer.

Head-First Company plans to sell 4,400 bicycle helmets at $84 each in the coming year. Product costs include: Direct materials per helmet $ 30 Direct labor per helmet 5.50 Variable factory overhead per helmet 2.00 Total fixed factory overhead 20,000   Variable selling expense is a commission of $2.90 per helmet; fixed selling and administrative expense totals $29,500.   Required: 1. Calculate the total variable cost per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Head-First Company for the coming year.

Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenbergplans to sell 30,000 ceiling fans and 70,000 table fans in the coming year. Product price and costinformation includes:                                Ceiling Fan     Table FanPrice                            $60                 $15Unit variable cost        $12                 $7Direct fixed cost        $23,600         $45,000Common fixed selling and administrative expenses total $85,000.Required:1. What is the sales mix estimated for next year (calculated to the lowest whole number foreach product)?2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans.How many ceiling fans and table fans are sold at break-even?3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on theunit sales calculated in Requirement 2.4. What if Vandenberg, Inc., wanted to earn operating income equal to $14,400? Calculate thenumber of ceiling fans and table…

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Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and totalmonthly fixed costs are $500,000. What is the number of units that must be producedand sold to earn a target income amount of $2,400,000?

Pina Colada Racers makes bicycles. It has always purchased its bicycle tires from the Ivanhoe Tires at $25 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials Direct labor Variable manufacturing overhead Total relevant cost $8 $4 The company's fixed expenses would increase by $63,000 per year if managers decided to make the tire. (a1) Calculate total relevant cost to make or buy if the company needs 10,300 tires a year. Make $7 $ Buy