Zebra Company manufactures custom-designed skins (covers) for iPods and other portable MP3 devices. Variable costs are $14.00 per custom skin, the price is $20, and fixed costs are $106,200.

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 18,000 custom skins, what is the operating income?

$

4. Calculate the margin of safety in units and in sales revenue if 18,000 custom skins are sold.

Margin of safety in units units Margin of safety in sales revenue$