Calculate the contribution margin ratio

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Question - Head-First Company plans to sell 4,400 bicycle helmets at $84 each in the coming year. Unit variable cost is $50.40 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $19,000 and fixed selling and administrative expense is $30,300.

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.

Reference no: EM133046954

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