Juan Martinez Played Classical Guitar Professionally Until His Motorcycle Accident

question 28

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.
Juan wishes to make $2,500 of operating profit each month. If so, how much sales revenue will Juan have to make?

• A)$8,760
• B)$8,140
• C)$8,400
• D)$7,960

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Definitions:

Adaptive Employee Benefits

Flexible benefits programs designed to meet the diverse needs of employees.

Balanced Scorecard Systems

A strategic planning and management system that organizations use to communicate what they are trying to accomplish, align the day-to-day work that everyone is doing with strategy, monitor organization performance against strategic goals, and improve various internal functions as well as external outcomes.

Employer-Required Benefits

Benefits that employers are mandated by law to provide to their employees, such as social security, workers compensation, and unemployment insurance.

Employee Selection

The process of interviewing and evaluating candidates for a specific job and choosing the most suitable one.