Martin Was a Professional Classical Guitar Player Until a Motorcycle

question 248

Multiple Choice

Martin was a professional classical guitar player 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 $900,and the fixed monthly operating costs are as follows: $$\begin{array} { | l | r | } \hline \text { Rent and utilities } & \$ 800 \\\hline \text { Wages and benefits to luthier } & 2000 \\\hline \text { Other expenses } & 474 \\\hline\end{array}$$ Martin's accountant told him about contribution margin ratios,and Martin understood clearly that for every dollar of sales,$0.65 went to cover his fixed costs,and anything above that point was profit.
Martin wishes to earn $4000 of operating profit each month.Calculate the number of guitars Martin will need to sell to achieve the target profit.(Round your answer up to the nearest whole guitar.)

• A) 3 guitars
• B) 12 guitars
• C) 4 guitars
• D) 13 guitars

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Definitions:

Cadaver

A dead body. Human cadavers are used in medical schools for the purpose of dissection to learn the parts of the body.

Disengagement

The process of withdrawing from social relationships or roles, often seen in the elderly or those nearing end of life.

Master Status

The status (position) most important in establishing an individual’s social identity.

Awareness Contexts

The varying degrees of understanding or perception a person has about their environment or situation, especially in cognitive and social domains.