Colin was a professional classical guitarist until a motorcycle accident left him disabled.After long months of therapy,he hired an experienced luthier and started a small shop to make and sell Spanish guitars.The guitars sell for $900,and the fixed monthly operating costs are as follows: $$\begin{array} { | l | r | }
\hline \text { Rent and utilities } & \$ 700 \
\hline \text { Wages and benefits to luthier } & 2,000 \
\hline \text { Other expenses } & 475 \
\hline
\end{array}$$ Colin's accountant told him about contribution margin ratios,and Colin understood clearly that for every dollar of sales,$0.60 went to cover his fixed costs,and anything above that point was profit.
What is the amount of revenue Colin should earn each month to break even? (Round your answer to the nearest dollar. )

Question

Colin was a professional classical guitarist until a motorcycle accident left him disabled.After long months of therapy,he hired an experienced luthier and started a small shop to make and sell Spanish guitars.The guitars sell for $900,and the fixed monthly operating costs are as follows: $$\begin{array} { | l | r | } 
\hline \text { Rent and utilities } & \$ 700 \
\hline \text { Wages and benefits to luthier } & 2,000 \
\hline \text { Other expenses } & 475 \
\hline
\end{array}$$ Colin's accountant told him about contribution margin ratios,and Colin understood clearly that for every dollar of sales,$0.60 went to cover his fixed costs,and anything above that point was profit.
What is the amount of revenue Colin should earn each month to break even? (Round your answer to the nearest dollar. )

Quizplus · Accepted Answer

The Answer of Colin was a professional classical guitarist until a motorcycle accident left him disabled.After long months of therapy,he hired an experienced luthier and started a small shop to make and sell Spanish guitars.The guitars sell for $900,and the fixed monthly operating costs are as follows: $$\begin{array} { | l | r | } 
\hline \text { Rent and utilities } & \$ 700 \
\hline \text { Wages and benefits to luthier } & 2,000 \
\hline \text { Other expenses } & 475 \
\hline
\end{array}$$ Colin's accountant told him about contribution margin ratios,and Colin understood clearly that for every dollar of sales,$0.60 went to cover his fixed costs,and anything above that point was profit.
What is the amount of revenue Colin should earn each month to break even? (Round your answer to the nearest dollar. )

Colin Was a Professional Classical Guitarist Until a Motorcycle Accident