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. _______ per custom skin

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