The fixed costs of a swimming pool are $10,000 per month and each swim generates $10 in revenue and has a variable cost of $2. How many swims are needed per month to breakeven?
A) More information is needed to answer the question
B) 1,000
C) 1,250
D) 5,000

Question

Quizplus · Accepted Answer

Breakeven units (swims) is calculated by dividing total fixed costs $10,000 by the contribution per unit. In this case contribution per swim is $10 minus $2, equals $8. Therefore $10,000 divided by $8 = 1,250 swims per month.

The Fixed Costs of a Swimming Pool Are $10,000 Per