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Calculate the sales revenue that head-first must make

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Reference no: EM133140177

Question - Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Variable cost is 60% of the sales price; contribution margin is 40% of the sales price. Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense).

Required -

1. Calculate the sales revenue that Head-First must make to earn operating income of $81,900 by using the point in sales equation.

2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.

Reference no: EM133140177

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