Colin Was a Professional Classical Guitar Player Until His Motorcycle

question 110

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: $$\begin{array} { | l | r | } \hline \text { Rent and utilities } & \$ 800 \\\hline \text { Wages and benefits to luthier } & 2,500 \\\hline \text { Other expenses } & 480 \\\hline\end{array}$$ 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%.

Grasp the benefits that thorough planning brings in terms of time and cost savings during project execution.

Understand that project management involves dealing with uncertainties and predicting project aspects can be challenging.

Learn the importance of anticipating contingencies and building slack into project schedules for better preparedness.

Identify and correct grammatical fragments in sentences.

---

Definitions:

Oppressed Minorities

Groups within society that face systematic discrimination, marginalization, and denial of their rights, often based on ethnic, racial, religious, or gender identity.

Income Effect

The change in an individual's or economy's income and how that change affects the quantity demanded of a good or service.

Substitution Effect

The substitution effect occurs when consumers replace pricier items with less expensive alternatives as prices rise.

Economic Rent

The payment to an owner or factor of production in excess of the costs needed to bring that factor into production, essentially a surplus amount.