Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety Zebra Company manufactures custom-designed skins...

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Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety Zebra Company manufactures custom-designed skins...

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 $7.70 per custom skin, the price is $14, and fixed costs are $141,750.

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 23,000 custom skins, what is the operating income?
$

4. Calculate the margin of safety in units and in sales revenue if 23,000 custom skins are sold.

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

business accounting

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Answer 1

Answer #1

Answer: contribution Margin = Sales - Variable cost. = $14- $7.70 $6.30 per custom skin. 2. Breakeven units fixed cost contri

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Answer 2

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