90.2K

Verified Solution

Link Copied!

Instructions Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are priced at $75 and have variable costs of $44 each. The motorcycle helmets are priond at $235 and have variable costs of $130 each. Total fixed cost for Head-First as a whole equals $65,700 (includes all fixed factory overhead and fixed selling and administrative expense), Next year, Head-First expects to sell 4,900 bicycle helmets and 1,960 motorcycle helmets. Beauired: 1. Form a package of bicycle and motorcycle helmets based on the sales mix expected for the coming year. 2. Calculate the break-even point in units for bicycle helmets and for motorcycle helmets. 3. Check your answer by preparing a contribution margin toome statement Refer to the list below for the exact wording of textoms within your income statement Amount Description Operating Income Operating loss Ses Total contribution margin Total food com Total variable cost nstructions Sales Mix and Break-Even Point 1. Form a package of bicycle and motorcycle helmets based on the sales mix expected for the coming year, Package Contribution Margin Sales Mix Unit Contribution Margin Price Product Unit Variable Cost 15 IS Bicycle helmet Motorcycle helmet Package total 5 2 Calculate the break-even point in units for bicycle helmets and for motorcycle helmets. Break-Even Bicycle Helmets Break-Even Motorcycle Helmets 3. Check your answer by preparing a contribution margin income statement. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement Hond First Company Contribution Margin Income Statement Al Break-Even Point

Answer & Explanation Solved by verified expert

See Answer