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Question - Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (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).
Required -
1. Calculate the break-even number of helmets.
2. Check your answer by preparing a contribution margin income statement based on the break-even units.
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