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Question - Head-First Company plans to sell 5,800 bicycle helmets at $67 each in the coming year. Product costs include:
Direct materials per helmet $29
Direct labor per helmet 11.00
Variable factory overhead per helmet 4.25
Total fixed factory overhead 20,000
Variable selling expense is a commission of $3.80 per helmet; fixed selling and administrative expense totals $29,900.
Required -
1. Calculate the total variable cost per unit.
2. Calculate the total fixed expense for the year.
3. Prepare a contribution margin income statement for Head-First Company for the coming year.
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