Eric Was a Professional Classical Guitar Player Until His Motorcycle

question 156

Multiple Choice

Eric 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 $750 and the fixed monthly operating costs are as follows:

Eric'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.
What is the amount of revenue Eric should earn each month to break even?

• A)$10,750
• B)$7,167
• C)$5,167
• D)$6,334

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Definitions:

Hemoglobin

A protein found in red blood cells responsible for transporting oxygen from the lungs to the body's tissues and returning carbon dioxide from the tissues back to the lungs.

Nitrites

Nitrites are chemical compounds that can be used as food preservatives or can occur naturally, but in high amounts can be harmful.

Urinary Tract Infection

An infection in any part of the urinary system, often caused by bacteria.

Specific Gravity

The ratio of the density of a substance to the density of a reference substance, often water, indicating its relative heaviness.