Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question Content Area Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety Zebra Company manufactures custom-designed skins (covers) for iPods and other portable

Question Content Area

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 $10.80 per custom skin, the price is $16, and fixed costs are $66,560.

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 13,000 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 13,000 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Auditing

Authors: Vasuhi M

1st Edition

6206150747, 978-6206150749

More Books

Students also viewed these Accounting questions

Question

1. What are the six steps you can take to control your finances?

Answered: 1 week ago