1) | |||||
Product |
Price (A) |
Unit Variable Cost (B) |
Unit Contribution Margin (A - B ) |
Sales Mix | Package Contribution Margin |
Bicycle helmet | $ 72 | $ 42 | $ 30 | 4,800 | $ 144,000 |
Motorcycle helmet | $ 210 | $ 145 | $ 65 | 1,920 | $ 124,800 |
Package total | $ 268,800 | ||||
Break Even = Fixed Cost / Contribution = $ 44,800 / $ 268,800 |
|||||
2) | |||||
Break-Even Bicycle Helmets = Expected sales units x Break Even = 4,800 x $ 44,800 / $ 268,800 |
800 Units | ||||
Break-Even Motorcycle Helmets = Expected sales units x Break Even = 1,920 x $ 44,800 / $ 268,800 |
320 Units | ||||
3) | |||||
Head-First Company Contribution Margin Income Statement At Break Even Point |
|||||
Sales ( 800 x$ 72 ) + ( 320 x $ 210 ) |
$ 124,800 | ||||
Less: variable Cost ( 800 x$ 42 ) + ( 320 x $ 145 ) |
($ 80,000) | ||||
Contribution Margin | $ 44,800 | ||||
Less: Fixed Costs | ($ 44,800) | ||||
Net Income (or) Loss | $ 0 |
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