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Question - Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Product costs include:
Direct materials per helmet $30
Direct labor per helmet 8
Variable factory overhead per helmet 4
Total fixed factory overhead 20,000
Variable selling expense is a commission of $3 per helmet; fixed selling and administrative expense totals $29,500.
Required -
1. Calculate the total variable cost per unit.
2. Prepare a contribution margin income statement for Head - First coming for the coming year. Refer to the list of Amount Descriptions for the exact wording of text items within the income statement.
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