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.
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.
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 4,200 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. |
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