Fixed cost and contribution margin income statement

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Reference no: EM131342523

1. How can sensitivity analysis be used in conjunction with CVP analysis?

2. Why is a declining margin of safety over a period of time an issue of concern to managers?

3. VARIABLE COST, FIXED COST, CONTRIBUTION MARGIN INCOME STATEMENT
Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year. Product costs include:

Direct material per helmet	$ 30
Direct labor per helmet	5
Variable overhead per helmet	12
Total fixed factory overhead	14,000

Variable selling expense is a commission of $2 per helmet; fixed selling and administrative expense totals $15,400.

Reference no: EM131342523

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