The Block Defender Video Game Sells for $50 and Costs

question 31

Multiple Choice

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.

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