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Head-First Company plans to sell 5,800 bicycle helmets at $67 each in the coming year. Unit...

Head-First Company plans to sell 5,800 bicycle helmets at $67 each in the coming year. Unit variable cost is $44 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $40,710 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the break-even number of helmets. 2. Check your answer by preparing a contribution margin income statement based on the break-even units.

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Answer #1

rate positively ..

Given that -
Sales price per unit = 67
Variable cost per unit = 44
Contribution margin per unit 23
Fixed cost = 40,710
Ans 1 : Calculate the break-even number of helmets.
Break even number = Fixed cost/Contribution margin per unit
40710/23
1770 halmet
Ans 2
contribution margin income statement
Sales 1770*67 118590
Variable cost 1770*44 77880
Contribution margin 40710
Fixed cost = 40,710
Profit = 0
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