Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head-First expects to produce total

Question:

Head-First Company now sells both bicycle helmets and motorcycle helmets. Next year, Head-First expects to produce total revenue of $570,000 and total variable costs of $388,000. Total fixed costs are expected to be $54,600.

Required:

1. Calculate the break-even point in sales dollars for Head-First. (Round the contribution margin ratio to four significant digits.)

2. Check your answer by preparing a contribution margin income statement.

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...