eBook Show Me How Calculator Print Item Break-Even Point in Sales Dollars sales

Question

eBook Show Me How Calculator Print Item Break-Even Point in Sales Dollars sales Revenue Contribution Margin Income Statement Instructions Head-First Company plans to sell 4400 bicycle helmets at $72 each in the coming year vanable cost is 56% of the sales pnce, contribution margin is 44% of the sale price. Total fixed cost equals $54,560 (includes fixed factory overhead and fixed selling and administrative expense) Required 1. Calculate the sales revenue that Head-First must make to break even by using the break-even point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the break-even point in sales dollars. Amount Descriptions Refer to the list below for the exact wording of text items within your income statement Amount Descriptions Operating income

Explanation / Answer

1.

2.

Breakeven point in unit = Fixed costs / Contribution margin per unit Breakeven point in unit = $54,560 / ($72 * 44%) Breakeven point in unit = 1,722.222 Units Break Even Sales in Dollars = Break even point in unit * Price per unit Break Even Sales in Dollars = 1,722.222 * $72 Break Even Sales in Dollars = $124,000

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