Juan Martinez Played Classical Guitar Professionally Until His Motorcycle Accident

question 42

Multiple Choice

Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars. The guitars sell for $600, and the fixed monthly operating costs are as follows: Juan got confused when his accountant told him about contribution margin ratios, but he understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, and that anything past that point was pure profit.
How many dollars of revenue does Juan have to make each month to break even?

• A)$3,950
• B)$4,800
• C)$3,360
• D)$5,200

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Definitions:

Avoidant Personality Disorder

A mental health condition characterized by extreme shyness, feelings of inadequacy, and a hypersensitivity to rejection.

Detachment

The emotional state of being aloof or uninvolved with other people or with one's own emotions.

Avoidant Personality Disorder

A mental condition characterized by a long-standing pattern of extreme social inhibition, feelings of inadequacy, and sensitivity to rejection.

Silverware

Utensils made from silver, stainless steel, or another metal used for eating or serving food.