Colin Was a Professional Classical Guitar Player Until His Motorcycle

question 12

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:
$$\begin{array} { | l | l | } \hline \text { Rent and electricity and gas } & \$ 1210 \\\hline \text { Wages and benefits to luthier } & 3100 \\\hline \text { Other expenses } & 600 \\\hline\end{array}$$
Colin's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales,$0.85 went to cover his fixed costs,and that anything past that point was pure profit.
Colin wishes to earn $5100 of operating profit each month.Calculate the amount of sales revenue required to achieve the target profit.

• A) $6000
• B) $11,777
• C) $4910
• D) $5100

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Definitions:

Gothic Europe

Pertains to the art, architecture, and cultural period that flourished in Europe from the 12th to the 16th centuries, characterized by features such as pointed arches, ribbed vaults, and flying buttresses.

Classical Antiquity

A period in history (approximately 8th century BCE to the 5th century CE) that encompasses ancient Greek and Roman civilizations, noted for their contributions to art, philosophy, government, and science.

Fine Book Production

The craft and art of creating high-quality books with meticulous attention to detail in typography, paper quality, binding, and illustration, often for limited editions or special collections.

Printing Press

A machine for applying pressure to an inked surface resting upon print media (such as paper or cloth), thereby transferring an image; revolutionized publishing and the dissemination of information.