Question: Break-Even Point in Units 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). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense).
Required: 1. Calculate the break-even number of helmets.
2. Check your answer by preparing a contribution margin income statement based on the break-even units.