Slate Was a Professional Classical Guitar Player Until a Motorcycle

question 12

Multiple Choice

Slate was a professional classical guitar player until a motorcycle accident at 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 $700 each, and the fixed monthly operating costs are as follows: $$\begin{array} { | l | r | } \hline \text { Rent and utilities } & \$ 810 \\\hline \text { Wages and benefits toluthier } & 2520 \\\hline \text { Other expenses } & 480 \\\hline\end{array}$$ Slate's accountant told him about contribution margin ratios, and Slate understood clearly that for every dollar of sales, $0.60 went to cover his fixed costs, and anything above that point was profit.
Slate is planning to increase the sales price to $820. What impact will the increase in sales price have on the breakeven point in units? (Round your answer up to the nearest whole guitar.)

• A) It will stay the same.
• B) It will go down from 12 to 8 units.
• C) It will go up from 8 to 12 units.
• D) It will go down from 10 to 8 units.

Understand the legal protections against the misuse of evidence and the procedural safeguards in place for defendants.

Distinguish between misdemeanors, felonies, and non-criminal wrongs.

Understand the concept of target markets and their significance in marketing efforts.

Grasp the principles of financial analysis in marketing, including break-even and expense forecasting.

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Definitions:

FOB Origin Pricing

A pricing term indicating that the buyer is responsible for freight costs and assumes risk for the goods once they leave the seller's premises.

Uniform Delivered Pricing

The price the seller quotes that includes all transportation costs.

Transportation Costs

Expenses associated with the process of moving goods or materials from one location to another.

Hi-Lo Pricing

A retail pricing strategy where prices are regularly discounted from higher listed prices, creating a sense of value and urgency among consumers.