Skate and Snowboard Unlimited has a contribution margin of $20 per unit and fixed operating costs of $25,000. What is the break even in terms of operating earnings for Skate and Snowboard Unlimited?
A) 1,250 units
B) 5,000 units
C) 20,000 units
D) 25,000 units
E) 500,000 units

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the fixed operating costs by the contribution margin per unit. Therefore, $25,000 / $20 = 1,250 units.

Skate and Snowboard Unlimited Has a Contribution Margin of $20