You want to open up a custom skateboard shop. You can sell each skate-board for $160. It takes 3 hours to make each skateboard. Each skateboard maker earns $25 per hour. Each skateboard costs $15 in raw materials. You estimate that your fixed costs are $20,000 per month.
1. What is the contribution margin?
2. How many skateboards must be sold each month in order to break even?
3. What is the break-even dollar amount?
4. How many skateboards must be sold to earn a s10,000 profit each month?
5. What is your total monthly revenue if you want to earn a profit of $8,000?