Homework Help is Here – Start Your Trial Now!
Business
Accounting
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 o stringed 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 utilities Wages and benefits to luthier Other expenses $700 $2,400 471 Ajax'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, and anything 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.) O A. 7 guitars O B. 3 guitars O C. 8 guitars O D. 6 guitars ...

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 o stringed 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 utilities Wages and benefits to luthier Other expenses $700 $2,400 471 Ajax'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, and anything 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.) O A. 7 guitars O B. 3 guitars O C. 8 guitars O D. 6 guitars ...

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

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 of stringed 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 utilities Wages and benefits to luthier Other expenses $700 $2,400 471 Ajax'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, and anything 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 guitars B. 3 guitars C. 8 guitars D. 6 guitars
Transcribed Image Text:← 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 of stringed 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 utilities Wages and benefits to luthier Other expenses $700 $2,400 471 Ajax'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, and anything 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 guitars B. 3 guitars C. 8 guitars D. 6 guitars
Expert Solution
steps

Step by step

Solved in 5 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS