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Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety Zebra Company manufactures custom-designed...

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Accounting

Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety

Zebra Company manufactures custom-designed skins (covers) for iPods and other portable MP3 devices. Variable costs are $10.40 per custom skin, the price is $16, and fixed costs are $164,080.

Required:

1. What is the contribution margin for one custom skin? Round your answer to the nearest cent. $___5.60__ per custom skin

2. How many custom skins must Zebra Company sell to break even? ___29300___ custom skins

3. If Zebra Company sells 30,000 custom skins, what is the operating income? _______

4. Calculate the margin of safety in units and in sales revenue if 30,000 custom skins are sold.

Margin of safety in units ______ units
Margin of safety in sales revenue ______

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