Question: VARIABLE COST RATIO, CONTRIBUTION MARGIN RATIO Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year. Unit variable cost is

VARIABLE COST RATIO, CONTRIBUTION MARGIN RATIO Head-First Company plans to sell 5,000 bicycle helmets at $70 each in the coming year.

Unit variable cost is $49 (includes direct materials, direct labor, variable overhead, and variable selling expense). Fixed factory overhead is $14,000 and fixed selling and administrative expense is $15,400.

Required:

. Calculate the variable cost ratio.

. Calculate the contribution margin cost ratio.

. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable costs, and total contribution margin.

Cornerstone Exercise

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Introductory Financial Accounting Questions!

In Figure, the rod has a resistance R and the rails are horizontal and have negligible resistance. A battery of emf E and negligible internal resistance is connected between points a and b such that...

Variable Cost Ratio, Contribution Margin Ratio Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct materials, direct...

Brief Exercise 7-15 Variable Cost Ratio, Contribution Margin Ratio Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct...

Brief Exercise 7-15 Variable Cost Ratio, Contribution Margin Ratio Head-First Company plans to sell 5,000 bicycle helmets ar $75 each in the coming yea variable cost is $45 (includes direct...

Variable Cost Ratio, Contribution Margin Ratio Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct materials, direct...

Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor,...

Brief Exercise 7-27 Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct...

Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year, Unit variable cost is $21 (includes direct materials, direct labor,...

riable Cost Ratio, Contribution Margin Ratio Instructions nstructions Amount Descriptions Ratios Contribution Margin Income Statement Head-First Company plans to sell 5,800 bicycle helmets at $67...

OBJECTIVE 1 Brief Exercise 7-26 Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sll 3,500 pairs of shoes at $60 cach in the coming year. Unit vi Example 7.3 able cost is $21...

Instructions 3 . Head - First Company plans to sell 5 , 0 0 0 bicycle helmets at $ 7 5 each in the coming year. Product costs include: Direct materials per helmet: $ 3 0 Direct labor per helmet: 8...

b) An elevator consists out of thin aluminum rods that are pin-connected to each other. The elevator is placed in a cylinder and on top of the elevator is a platform. At room temperature, the rods...

Please answer each question A substantive response should be a minimum of 3-6 well-structured sentences Unit 5 DQ1: Internal Controls and Bank Reconciliations 15 pts What is bank reconciliation and...

Current Attempt in Progress Sandhill Toys Company has a balance in inventory of $626600 at the beginning of the month. During the month Sandhill purchases additional inventory of $7661800. Sandhill...

In what respects does Scrum agree with UP?

Prepare a Simple Cash Book from the following transactions of Mr. Ram Gopal of Delhi: 2008 April 1 Mr. Ram Gopal started restaurant business with cash 8000 3 He bought provisions for cash 5000 5 Sold...

Enter the following transactions in Cash Book with discount columns: 2007 Jan. 1 Cash in hand 5 Paid to Ram 1500 300 Discount allowed by him 10 8 Purchased goods 400 10 10 Received from Gupta 980...

Prepare a Cash Book from the following transactions: 2007 July 1 Balance from last month 6250.00 3 Purchased goods for cash from R. Lal 4250.00 4 Received cash from Amar Nath 210.50 9 Paid cash for...

Astro Company sold equipment on July 1, 2021 for $75,000. The equipment had cost $21 300 and had 2000 accumulated depreciation of January 1 2021 The equipment is being a depreciated $24,000 Required:...

7 Land is the only asset that is not subject to annual depreciation. True O False will save this response

A Moving to another question will save this response. Question 5 A company declared a cash dividend. What is the impact of this transaction on assets, liabilities, and equity? O Assets decrease,...