Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

15Eric was a professional classical guitar player until his motorcycle accident that left him disabled. After long months of therapy, he hired an experienced luthier

15Eric 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 $740 and the fixed monthly operating costs are as follows: Rent and utilities $1,400 Wages and benefits to luthier 2,500 Other expenses 700 Eric's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0.70 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? Round your final answer to the nearest whole dollar.A.

$ 4 comma 572$4,572
B.
$ 15 comma 334$15,334
C.
$ 5 comma 572$5,572
D.
$ 6 comma 572$6,572

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions