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 $8.40 per custom skin, the price is $12, and fixed costs are $105,840. 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 30,000 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 30,000 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
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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 $8.40 per custom skin, the price is $12, and fixed costs are $105,840.
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 30,000 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 30,000 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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