Head-First Company now sells both bicycle helmets and motorcycle helmets. Next y

Question

Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to produce total revenue of $585,000 and incur total variable cost of $372,000. Total fixed cost is expected to be $60,000.

Check your answer by preparing a contribution margin income statement.

X

Break-Even Sales Dollars

1. Calculate the break-even point in sales dollars for Head-First. Round the contribution margin ratio to four decimal places and sales to the nearest dollar.

The break-even point in sales equals .

2. Check your answer by preparing a contribution margin income statement. 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

At Break-Even Sales Dollars

1

2

3

4

5

Required: 1. Calculate the break-even point in sales dollars for Head-First. Round the contribution margin ratio to four decimal places and sales to the nearest dollar. 2.

Check your answer by preparing a contribution margin income statement.

Required: 1. Calculate the break-even point in sales dollars for Head-First. Round the contribution margin ratio to four decimal places and sales to the nearest dollar. 2. Check your answer by preparing a contribution margin income statement.

X

Break-Even Sales Dollars

1. Calculate the break-even point in sales dollars for Head-First. Round the contribution margin ratio to four decimal places and sales to the nearest dollar.

The break-even point in sales equals .

2. Check your answer by preparing a contribution margin income statement. 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

At Break-Even Sales Dollars

1

2

3

4

5

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Sales              585,000.00 Less Variable Expenses           (372,000.00) Contribution Margin = 585000 - 372000              213,000.00 Variable expense Ratio = 372000/585000 63.59% Contribution Margin Ratio = 213000/585000 36.41% Fixed cost                60,000.00 break-even point in sales dollars = 60000 / 36.41%              164,788.73 2) Sales              164,788.73 Less Variable Expenses = 164788.73*63.59%           (104,788.73) Contribution Margin = 164788.73 - 104788.73                60,000.00 Fixed cost                60,000.00 Net operating income                               -

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