Martin Was a Professional Classical Guitar Player Until a Motorcycle

question 165

Multiple Choice

Martin was a professional classical guitar player until a motorcycle accident left him disabled.After long months of therapy,he hired an experienced luthier and started a small shop to make and sell Spanish guitars.The guitars sell for $900,and the fixed monthly operating costs are as follows: $$\begin{array} { | l | r | } \hline \text { Rent and utilities } & \$ 800 \\\hline \text { Wages and benefits to luthier } & 2000 \\\hline \text { Other expenses } & 474 \\\hline\end{array}$$ Martin's accountant told him about contribution margin ratios,and Martin understood clearly that for every dollar of sales,$0.65 went to cover his fixed costs,and anything above that point was profit.
Martin wishes to earn $4000 of operating profit each month.Calculate the number of guitars Martin will need to sell to achieve the target profit.(Round your answer up to the nearest whole guitar.)

• A) 3 guitars
• B) 12 guitars
• C) 4 guitars
• D) 13 guitars

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Definitions:

Taste Buds

Sensory organs located on the tongue, responsible for the perception of taste.

Daily Consumption

The amount of food, drink, or other products used by an individual on a daily basis.

Taste Bud Pore

An opening on the surface of the tongue through which taste stimuli enter and interact with taste receptor cells located in taste buds, allowing for the sensation of taste.

Receptor Cells

Specialized cells that respond to specific chemical or physical stimuli in the body and transmit signals to nerves.