Question
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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started