Question

Head-First Company plans to sell 4,400 bicycle helmets at $84 each in the coming year. Unit...

Head-First Company plans to sell 4,400 bicycle helmets at $84 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 $60,450 (includes fixed factory overhead and fixed selling and administrative expense).

Required:
1. Calculate the break-even number of helmets.
2.

Check your answer by preparing a contribution margin income statement based on the break-even units.

1. Calculate the break-even number of helmets.

helmets

2. Check your answer by preparing a contribution margin income statement based on the break-even units. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement. If there is an operating loss, enter the amount as a negative number using a minus sign.

Head-First Company

Contribution Margin Income Statement

At Break-Even Point

1

2

3

4

5

Homework Answers

Answer #1

1) Break even point = Fixed cost/contribution margin per unit

                                 = 60450/(84-45)

Break even point = 1550 units

2) 2. Check your answer by preparing a contribution margin income statement based on the break-even units

Sales (1550*84) 130200
Variable cost (1550*45) (69750)
Contribution margin 60450
Fixed cost (60450)
Net operating income 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit...
Head-First Company plans to sell 5,000 bicycle helmets at $75 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 $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the break-even number of helmets. 2. Check your answer by preparing a contribution margin income statement based on the break-even units.
Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit...
Head-First Company plans to sell 5,000 bicycle helmets at $75 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 $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the break-even number of helmets. 2. Check your answer by preparing a contribution margin income statement based on the break-even units.
Head-First Company plans to sell 4,400 bicycle helmets at $84 each in the coming year. Unit...
Head-First Company plans to sell 4,400 bicycle helmets at $84 each in the coming year. Unit variable cost is $50.40 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $19,000 and fixed selling and administrative expense is $30,300. Required: 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio. 3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income...
Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit...
Head-First Company plans to sell 5,000 bicycle helmets at $75 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 $49,500 (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 $81,900. 2. Check your answer by preparing a contribution margin income statement based on the number of units...
Head-First Company plans to sell 4,200 bicycle helmets at $71 each in the coming year. Unit...
Head-First Company plans to sell 4,200 bicycle helmets at $71 each in the coming year. Unit variable cost is $44 (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 $67,990. 2. Check your answer by preparing a contribution margin income statement based on the number of units...
Head-First Company plans to sell 4,400 bicycle helmets at $70 each in the coming year. Variable...
Head-First Company plans to sell 4,400 bicycle helmets at $70 each in the coming year. Variable cost is 60% of the sales price; contribution margin is 40% of the sales price. Total fixed cost equals $50,300 (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 $78,500 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement...
Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Variable...
Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Variable cost is 60% of the sales price; contribution margin is 40% of the sales price. Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Head-First must make to break even by using the break-even point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on...
Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are...
Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are priced at $76 and have variable costs of $43 each. The motorcycle helmets are priced at $205 and have variable costs of $130 each. Total fixed cost for Head-First as a whole equals $59,850 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Head-First expects to sell 5,250 bicycle helmets and 2,100 motorcycle helmets. Required: 1. Form a package of...
Units to Earn Target Income Head-First Company plans to sell 5,000 bicycle helmets at $75 each...
Units to Earn Target Income Head-First Company plans to sell 5,000 bicycle helmets at $75 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 $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: Be sure to read the instructions on each panel for additional guidance. 1. Calculate the number of helmets Head-First must sell to earn operating income of $81,900....
Head-First Company plans to sell 4,400 bicycle helmets at $72 each in the coming year. Product...
Head-First Company plans to sell 4,400 bicycle helmets at $72 each in the coming year. Product costs include: Direct materials per helmet $ 30 Direct labor per helmet 5.00 Variable factory overhead per helmet 4.50 Total fixed factory overhead 20,000 Variable selling expense is a commission of $3.30 per helmet; fixed selling and administrative expense totals $28,500. Required: 1. Calculate the total variable cost per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin...