Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety Cheetah Company manufactures custom-designed skins (covers) for iPods® and other portable MP3 devices. Variable costs are $10.80 per custom skin, the price is $18, and fixed costs are $173,520. 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 Cheetah Company sell to break even? fill in the blank 2 custom skins 3. If Cheetah Company sells 25,000 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 25,000 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
Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety Cheetah Company manufactures custom-designed skins (covers) for iPods® and other portable MP3 devices. Variable costs are $10.80 per custom skin, the price is $18, and fixed costs are $173,520. 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 Cheetah Company sell to break even? fill in the blank 2 custom skins 3. If Cheetah Company sells 25,000 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 25,000 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety
Cheetah Company manufactures custom-designed skins (covers) for iPods® and other portable MP3 devices. Variable costs are $10.80 per custom skin, the price is $18, and fixed costs are $173,520.
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 Cheetah Company sell to break even?
fill in the blank 2 custom skins
3. If Cheetah Company sells 25,000 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 25,000 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 |
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