Ajax Was a Professional Classical Guitarist Until a Motorcycle Accident

question 40

Multiple Choice

Ajax was a professional classical guitarist 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 $800, and the fixed monthly operating costs are as follows: $$\begin{array} { | l | r | } \hline \text { Rent and utilities } & \$ 600 \\\hline \text { Wages and benefits toluthier } & 2300 \\\hline \text { Other expenses } & 479 \\\hline\end{array}$$ Ajax's accountant told him about contribution margin ratios, and Ajax understood clearly that for every dollar of sales, $0.60 went to cover his fixed costs, and anything above that point was profit.
How many guitars does Ajax need to sell each month to break even? (Round your answer up to the nearest whole guitar.)

• A) 5 guitars
• B) 3 guitars
• C) 7 guitars
• D) 8 guitars

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Definitions:

Long Periods

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Participant Observation

A method in social science research where the researcher immerses themselves in the environment of their subjects to observe and participate in their activities.

Participant Observation

A qualitative research method where researchers immerse themselves in a group or social setting in order to observe behaviors and interactions from within.

Street Corner Society

A term used to describe the social structure and dynamics of people in urban neighborhood communities, often focusing on informal groupings.