Head-First Company plans to sell 4,400 bicycle helmets at $72 each in the coming year. Unit variable cost is $43.20 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $19,000 and fixed selling and administrative expense are $29,700. 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio.

Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
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Head-First Company plans to sell 4,400 bicycle helmets at $72 each in
the coming year. Unit variable cost is $43.20 (includes direct materials,
direct labor, variable factory overhead, and variable selling expense).
Fixed factory overhead is $19,000 and fixed selling and administrative
expense are $29,700.
1. Calculate the variable cost ratio.
2. Calculate the contribution margin ratio.
Transcribed Image Text:Head-First Company plans to sell 4,400 bicycle helmets at $72 each in the coming year. Unit variable cost is $43.20 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $19,000 and fixed selling and administrative expense are $29,700. 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio.
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