Zebra 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 $115,200.

Required:

1. What is the contribution margin for one custom skin? Round your answer to the nearest cent. ______ custom skin

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

3. If Zebra Company sells 13,000 custom skins, what is the operating income?

4. Calculate the margin of safety in units and in sales revenue if 13,000 custom skins are sold.

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