Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Sales= 5,000 units
Selling price= $75
Product costs include:
Direct materials per helmet= $30
Direct labor per helmet= $8
Variable factory overhead per helmet= $4
Total fixed factory overhead 20,000
Variable selling expense is a commission of $3 per helmet
The fixed selling and administrative expense totals $29,500
<u>The total variable cost is calculated as follow:</u>
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Total variable cost= unitary variable cost*number of units
Unitary variable cost= direct material + direct labor + variable overhead + variable selling and administrative
Total variable cost= (30 + 8 + 4 + 3)*5,000= $225,000
Total fixed costs= 20,000 + 29,500= $49,500
<u>Income statement:</u>
Sales= 5,000*75= 375,000
Total variable cost= (225,000)
Contribution margin= 150,000
Total fixed factory overhead= (20,000)
The fixed selling and administrative expense= (29,500)
Net operating income= $100,500
