Head-First Company plans to sell 4,400 bicycle helmets at $70 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 an operating income of $61,200. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 29BEB: Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in...
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Head-First Company plans to sell 4,400 bicycle helmets at $70
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
an operating income of $61,200.
2. Check your answer by preparing a contribution margin income
statement based on the number of units calculated.
Transcribed Image Text:Head-First Company plans to sell 4,400 bicycle helmets at $70 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 an operating income of $61,200. 2. Check your answer by preparing a contribution margin income statement based on the number of units calculated.
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