im.8 ←Ajax was a professional classical guitarist until a motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier (a maker ofstringed 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:Rent and utilitiesWages and benefits to luthierOther expenses$700$2,400471Ajax's accountant told him about contribution margin ratios, and Ajax understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, andanything above that point was profit.How many guitars does Ajax need to sell each month to break even? (Round your answer up to the nearest whole guitar.)A. 7 guitarsB. 3 guitarsC. 8 guitarsD. 6 guitars

Break-even point:— It is the point of production where total cost is equal to total revenue. At this…

Answered: Ajax was a professional classical…

Principles of Accounting Volume 2

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ISBN:9781947172609

Author:OpenStax

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Chapter10: Short-term Decision Making

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Problem 5PB: Blake Cohen Painting Service specializes in small paint jobs. His normal charge is $350/day plus...

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