Head-First Company plans to sell 4,200 bicycle helmets at $67 each in the coming year. Variable cost is 66% of the sales price; contribution margin is 34% of the sales price. Total fixed cost equals $42,585 (includes fixed factory overhead and fixed selling and administrative expense).   Required: 1. Calculate the sales revenue that Head-First must make to break even by using the break-even point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the break-even point in sales dollars.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 16BEA
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Head-First Company plans to sell 4,200 bicycle helmets at $67 each in the coming year. Variable cost is 66% of the sales price; contribution margin is 34% of the sales price. Total fixed cost equals $42,585 (includes fixed factory overhead and fixed selling and administrative expense).
  Required:
1. Calculate the sales revenue that Head-First must make to break even by using the break-even point in sales equation.
2. Check your answer by preparing a contribution margin income statement based on the break-even point in sales dollars.
 
 
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Breakeven point is that point at which company is recovering its fixed costs and variable costs only.

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