James 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:

James'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 Colin should earn each month to break even?

A) $9,952

B) $6,635

C) $4,968

D) $5,833

Rent and utilities $1,000 Wages and benefits to luthier 2.500 Other expenses 481