Question
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
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 $6.00 per custom skin, the price is $10, and fixed costs are $116,000.
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 | $ |
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