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Question 1: At January 1, 2020, Bridgestine Inc. has a beginning inventory of 5,000 surfboards. Ross estimates it will sell 18,000 units during the first quarter of 2020 with a 5% increase in sales each quarter. Bridestine's policy is to maintain an ending inventory equal to 25% of the next quarter's sales. Each surfboard costs $190 and is sold for $250. How many units should Bridgestine produce during the first quarter of 2020?
A. 17,725
B. 18,000
C. 13,000
D. 17,500
Calculate the Year 1 break-even quantity, contribution margin, and contribution margin ratio. Explain how the values were determined.
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