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Cornerstone Exercise 15-19 Break-Even Point in Units for a Multiple-Product Firm Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are priced at $75 and have variable costs of $45 each. The motorcycle helmets are priced at $220 and have variable costs of $140 each. Total fixed cost for Head-First as a whole equals $58,900 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Head-First expects to sell 5,000 bicycle helmets and 2,000 motorcycle helmets. Hide 1. Form a package of bicycle and motorcycle helmets based on the sales mix expected for the coming year. Any package with 5 bicycle helmets for every 2 motorcycle helmet is fine. For example, 5:2, or 10:4, or 30:12. Throughout the rest of this exercise, we will use 5:2. Product Bicycle helmet Motorcycle helmet Package total Price Unit Variable Cost Unit Contribution Margin Break-even bicycle helmets Break-even motorcycle helmets 2. Calculate the break-even point in units for bicycle helmets and for motorcycle helmets. helmets $ helmets Sales Mix Package Unit Contribution Margin $ $

Cornerstone Exercise 15-19 Break-Even Point in Units for a Multiple-Product Firm Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are priced at $75 and have variable costs of $45 each. The motorcycle helmets are priced at $220 and have variable costs of $140 each. Total fixed cost for Head-First as a whole equals $58,900 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Head-First expects to sell 5,000 bicycle helmets and 2,000 motorcycle helmets. Hide 1. Form a package of bicycle and motorcycle helmets based on the sales mix expected for the coming year. Any package with 5 bicycle helmets for every 2 motorcycle helmet is fine. For example, 5:2, or 10:4, or 30:12. Throughout the rest of this exercise, we will use 5:2. Product Bicycle helmet Motorcycle helmet Package total Price Unit Variable Cost Unit Contribution Margin Break-even bicycle helmets Break-even motorcycle helmets 2. Calculate the break-even point in units for bicycle helmets and for motorcycle helmets. helmets $ helmets Sales Mix Package Unit Contribution Margin $ $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3. Check your answer by preparing a contribution margin income statement. If an amount is zero, enter "0". Head-First Company Contribution Margin Income Statement At Break-Even Point ▼ ▾ Total
Transcribed Image Text:3. Check your answer by preparing a contribution margin income statement. If an amount is zero, enter "0". Head-First Company Contribution Margin Income Statement At Break-Even Point ▼ ▾ Total
Cornerstone Exercise 15-19 Break-Even Point in Units for a Multiple-Product Firm Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are priced at $75 and have variable costs of $45 each. The motorcycle helmets are priced at $220 and have variable costs of $140 each. Total fixed cost for Head-First as a whole equals $58,900 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Head-First expects to sell 5,000 bicycle helmets and 2,000 motorcycle helmets. Hide 1. Form a package of bicycle and motorcycle helmets based on the sales mix expected for the coming year. Any package with 5 bicycle helmets for every 2 motorcycle helmet is fine. For example, 5:2, or 10:4, or 30:12. Throughout the rest of this exercise, we will use 5:2. Product Bicycle helmet Motorcycle helmet Package total $ Break-even bicycle helmets Price Break-even motorcycle helmets $ Unit Variable Cost Unit Contribution Margin 2. Calculate the break-even point in units for bicycle helmets and for motorcycle helmets. helmets $ helmets E Sales Mix Package Unit Contribution Margin $ $
Transcribed Image Text:Cornerstone Exercise 15-19 Break-Even Point in Units for a Multiple-Product Firm Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are priced at $75 and have variable costs of $45 each. The motorcycle helmets are priced at $220 and have variable costs of $140 each. Total fixed cost for Head-First as a whole equals $58,900 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Head-First expects to sell 5,000 bicycle helmets and 2,000 motorcycle helmets. Hide 1. Form a package of bicycle and motorcycle helmets based on the sales mix expected for the coming year. Any package with 5 bicycle helmets for every 2 motorcycle helmet is fine. For example, 5:2, or 10:4, or 30:12. Throughout the rest of this exercise, we will use 5:2. Product Bicycle helmet Motorcycle helmet Package total $ Break-even bicycle helmets Price Break-even motorcycle helmets $ Unit Variable Cost Unit Contribution Margin 2. Calculate the break-even point in units for bicycle helmets and for motorcycle helmets. helmets $ helmets E Sales Mix Package Unit Contribution Margin $ $
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