Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to produce total revenue of $575,000 and incur total variable cost of $400,000. Total fixed cost is expected to be $60,500. 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
Requirement 1
Break-even sales |
$ 198,786 |
Working:
Sales revenue A |
$ 575,000.00 |
Variable costs |
$ 400,000.00 |
Contribution margin B |
$ 175,000.00 |
Contribution margin Ratio B/A |
30.4348% |
Fixed cost |
$ 60,500.00 |
Break-even sales (60,500/30.4348%) |
$ 198,785.60 |
Requirement 2
Head-First Company |
|
Contribution Margin Income Statement |
|
At Break-Even Sales Dollars |
|
Sales revenue |
$ 198,786 |
Variable costs $198,786*(100-30.4348) |
$ 138,286 |
Contribution margin |
$ 60,500 |
Fixed cost |
$ 60,500 |
Net operating income |
$ - |
Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to...
Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to produce total revenue of $575,000 and incur total variable cost of $400,000. Total fixed cost is expected to be $60,500. 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.
Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to produce total revenue of $575,000 and incur total variable cost of $400,000. Total fixed cost is expected to be $60,500. 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.
Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to produce total revenue of $575,000 and incur total variable cost of $400,000. Total fixed cost is expected to be $60,500. 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
Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to produce total revenue of $575,000 and incur total variable cost of $400,000. Total fixed cost is expected to be $60,500. 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. 1. Calculate the break-even point in sales...
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Hello! So i am trying to solve some of these questions, and this is one of the problems I am stuck on. If someone could provide a step by step that would be great, thanks. Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head- First expects to produce total revenue of $560,000 and incur total variable cost of $368,000. Total fixed cost is expected to be $57,200. Required: 1. Calculate the break-even point in sales dollars...