Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

Exercise 40

Variable Cost, Fixed Cost, Contribution Margin Income Statement
Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Product costs include:
Variable selling expense is a commission of $3 per helmet; fixed selling and administrative expense totals $29,500.
Required :
1. Calculate the total variable cost per unit.
2. Calculate the total fixed expense for the year.
3. Prepare a contribution margin income statement for Head-First Company for the coming year.