Question
Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety Cheetah Company manufactures custom-designed skins (covers) for iPods and other portable MP3 devices. Variable
Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety
Cheetah Company manufactures custom-designed skins (covers) for iPods and other portable MP3 devices. Variable costs are $11.00 per custom skin, the price is $20, and fixed costs are $171,900.
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 Cheetah Company sell to break even? fill in the blank 2 custom skins
3. If Cheetah Company sells 20,000 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 20,000 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 |
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