Brad Was a Professional Classical Guitar Player Until a Motorcycle

question 94

Multiple Choice

Brad 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: $$\begin{array} { | l | r | } \hline \text { Rent and utilities } & \$ 810 \\\hline \text { Wages and benefits to luthier } & 2,520 \\\hline \text { Other expenses } & 480 \\\hline\end{array}$$ Brad's accountant told him about contribution margin ratios,and Brad understood clearly that for every dollar of sales,$0.60 went to cover his fixed costs,and anything above that point was profit.
Brad 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.

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Definitions:

Eudaimonic Pleasure

A sense of fulfillment and happiness derived from living in accordance with one's true self and realizing one's potential.

Hedonic Pleasure

Pleasure derived from immediate satisfaction or sensory experiences, often associated with material and physical comforts.

Hedonic Pleasure

A type of pleasure derived from immediate gratification or the experience of enjoyable sensations.

Eudaimonic Pleasure

A sense of fulfillment or well-being that comes from pursuing meaningful goals and living in accordance with one's values and potentials.