Prepare a contribution margin income statement for Head-First Company for the coming year. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement. Head-First Company Contribution Margin Income Statement For the Coming Year 1 Total Per Unit 2 3 ✔ 4 5 6 Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Product costs include: Direct materials per helmet $ 30 Direct labor per helmet 8 Variable factory overhead per helmet 4 Total fixed factory overhead 20,000 Variable selling expense is a commission of $3 per helmet; fixed selling and administrative expense totals $29,500. Required: 1. Calculate the total variable cost per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Head-First Company for the coming year.
Prepare a contribution margin income statement for Head-First Company for the coming year. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement. Head-First Company Contribution Margin Income Statement For the Coming Year 1 Total Per Unit 2 3 ✔ 4 5 6 Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Product costs include: Direct materials per helmet $ 30 Direct labor per helmet 8 Variable factory overhead per helmet 4 Total fixed factory overhead 20,000 Variable selling expense is a commission of $3 per helmet; fixed selling and administrative expense totals $29,500. Required: 1. Calculate the total variable cost per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Head-First Company for the coming year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Question
Prepare a contribution margin income statement for Head-First Company for the coming year. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement.
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Head-First Company
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Contribution Margin Income Statement
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For the Coming Year
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Per Unit
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4
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Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Product costs include:
| Direct materials per helmet | $ 30 |
| Direct labor per helmet | 8 |
| Variable factory |
4 |
| Total fixed factory overhead | 20,000 |
Variable selling expense is a commission of $3 per helmet; fixed selling and administrative expense totals $29,500.
| Required: | |
| 1. | Calculate the total variable cost per unit. |
| 2. | Calculate the total fixed expense for the year. |
| 3. | Prepare a contribution margin income statement for Head-First Company for the coming year. |
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