Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Martin was a professional classical guitar player until a motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier (a
Martin was a professional classical guitar player until a motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier (a maker of stringed instruments) and started a small shop to make and sell Spanish guitars. The guitars sell for $800, and the fixed monthly operating costs are as follows: Rent and utilities Wages and benefits to luthier Other expenses $800 $2,500 $474 Martin's accountant told him about contribution margin ratios, and Martin understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, and anything above that point was profit Martin wishes to earn $2,500 of operating profit each month. Calculate the number of guitars Martin will need to sell to achieve the target profit. (Round your answer up to the nearest whole guitar.) O A. 12 guitars OB. 5 guitars O C. 10 guitars OD. 3 guitars
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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