The Block Defender video game sells for $50 and costs $10 to manufacture. Fixed costs were $5,000,000. Which of the following statements is correct?
A) The contribution margin ratio is 20% and the breakeven point is 5,000,000 units.
B) The contribution margin ratio is 20% and the breakeven point is 6,250,000 units.
C) The contribution margin ratio is 80% and the breakeven point is 5,000,000 units.
D) The contribution margin ratio is 80% and the breakeven point is 6,250,000 units.
E) The contribution margin ratio is 500% and the breakeven point is 1,000,000 units.
Correct Answer:
Verified
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