Contribution Margin, Break$-$Even Units, Contribution Margin Income Statement, Margin of Safety

Cheetah Company manufactures custom$-$designed skins $($covers$)$ for iPods ${?}^{}$ and other portable MP$3$ devices. Variable costs are $$9\mathrm{.}10$ per custom skin, the price is $$14,$ and fixed costs are $$110,740.$

Required:

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

$ per custom skin

How many custom skins must Cheetah Company sell to break even?

$$ custom skins

If Cheetah Company sells $23,000$ custom skins, what is the operating income?

$

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

Margin of safety in units $$ X units

Margin of safety in sales revenue $ $x$

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Calculate contribution margin per unit $($Price $-$ Variable cost$),$

$.$ Calculate break$-$even in units $($Fixed costs $/$ Contribution margin per unit$).$

$.$ Operating income $=$ Total Sales $-$ Total Variable Costs $-$ Fixed Costs