Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year. Product costs

Question:

Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year. Product costs include:
Direct materials per helmet .......$ 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.
Required:
1. Calculate the total variable cost per unit.
2. Calculate the total fixed expense for the year.
3. Prepare a income statement for Head-First Company for the coming year.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...