Colin Was a Professional Classical Guitar Player Until His Motorcycle

question 2

Multiple Choice

Colin was a professional classical guitar player until his motorcycle accident that left him disabled. After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and started a small shop to make and sell Spanish guitars. The guitars sell for $700 and the fixed monthly operating costs are as follows: Colin's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0.60 went to cover his fixed costs, and that anything past that point was pure profit. Colin is planning to increase the selling price to $750. What impact will the increase in selling price have on the contribution margin ratio?

• A)It will stay the same.
• B)It will go up 70% to 75%.
• C)It will go up from 60% to approximately 63%.
• D)It will go down from 70% to approximately 67%.

Understand the concept of utility in the selection process and how it applies to cost-benefit analysis.

Grasp the role of resumes in the selection process and the importance of evaluating them based on job descriptions.

Understand the significance of generalizability in selection tests across different contexts.

Recognize the need for fair and non-discriminatory selection practices in compliance with equal employment opportunity laws.

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Definitions:

Tax Rate

The specified percentage of incomes that the government earmarks for collection from individuals or corporations as taxes.

Net Income

The total earnings of a company after subtracting all expenses and taxes.

Retained Earnings

Profits that a company decides to keep or reinvest in the business after dividends have been paid out to shareholders, reflecting ongoing financial health and potential for growth.

Net Income

The ultimate financial gain of a company after expenses and taxes are deducted from its total revenue.