Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. head-first company had planned to sell 5,000 bicyc

Head-First Company had planned to sell 5,000 bicycle helmets at $76 each in the coming...

60.1K

Verified Solution

Question

Accounting

Head-First Company had planned to sell 5,000 bicycle helmets at $76 each in the coming year. Unit variable cost is $51 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Operating income at 5,000 units sold is $75,500. The degree of operating leverage is 1.7. Now Head-First expects to increase sales by 10% next year.

Required:

1. Calculate the percent change in operating income expected. %

2. Calculate the operating income expected next year using the percent change in operating income calculated in Requirement 1. $

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students