Question: 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

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 labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $20,000 and fixed selling and administrative expense is $29,500.

Required:

1. Calculate the variable cost ratio. %

2. Calculate the contribution margin ratio. %

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