Head-First Company plans to sell 4,200 bicycle helmets at $71 each in the coming year. Variable cost is 59% of the sales price; contribution margin is 41% of the sales price. Total fixed cost equals $50,000 (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 $66,440 by using the point in sales equation.2.Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.please answer do not image.

Income statement :— It is one of the financial statements that shows profitability, total revenue…

Answered: Head-First Company plans to sell 4,200…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Head-First Company plans to sell 4,200 bicycle helmets at $71 each in the coming year. Variable cost is 59% of the sales price; contribution margin is 41% of the sales price. Total fixed cost equals $50,000 (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 $66,440 by using the point in sales equation.
2.	Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1. please answer do not image.

Required:

Calculate the sales revenue that Head-First must make to earn operating income of $66,440 by using the point in sales equation.

Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.

please answer do not image.

Expert Solution