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 $7.00 per custom skin, the price is $10, and fixed costs are $54,000.

Required:

1. What is the contribution margin for one custom skin? Round your answer to the nearest cent. $fill in the blank 1 per custom skin

2. How many custom skins must Zebra Company sell to break even? fill in the blank 2 custom skins

3. If Zebra Company sells 19,000 custom skins, what is the operating income? $fill in the blank 3

4. Calculate the margin of safety in units and in sales revenue if 19,000 custom skins are sold.

Margin of safety in units	fill in the blank 4	units
Margin of safety in sales revenue	$fill in the blank 5