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Head-First Company plans to sell 4,700 bicycle helmets at $75 each in the coming year....

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Accounting

Head-First Company plans to sell 4,700 bicycle helmets at $75 each in the coming year. Unit variable cost is $45.75 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $21,000 and fixed selling and administrative expense is $28,700.

Required:
1. Calculate the variable cost ratio.
2. Calculate the contribution margin ratio.
3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin.

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