Slate was a professional classical guitar player unti a motorcycle accident at left him disabled Aller long months of therapy. he to make and sell Spanish guitars. The guitars sell for $700 each, and the fixed monthly operating costs are as follows: Rent and utilities Wages and benefits to luthier Other expenses $810 $2,500 $480 Slate's accountant told him about contribution margin ration, and Slate understood clearly that for every dollar of sales. 50 60 went to cover his fixed costs, and anything above that point was profit Slate is planning to increase the sales price to $820 What impact will the increase in sales price have on the breakeven point in units? (Round your answer up to the nearest whole guitar) OA. It will stay the same. OB. It will go up from 8 to 11 units OC. It will go down from 11 to 8 units OD. It will go down from 10 to 8 units
Slate was a professional classical guitar player unti a motorcycle accident at left him disabled Aller long months of therapy. he to make and sell Spanish guitars. The guitars sell for $700 each, and the fixed monthly operating costs are as follows: Rent and utilities Wages and benefits to luthier Other expenses $810 $2,500 $480 Slate's accountant told him about contribution margin ration, and Slate understood clearly that for every dollar of sales. 50 60 went to cover his fixed costs, and anything above that point was profit Slate is planning to increase the sales price to $820 What impact will the increase in sales price have on the breakeven point in units? (Round your answer up to the nearest whole guitar) OA. It will stay the same. OB. It will go up from 8 to 11 units OC. It will go down from 11 to 8 units OD. It will go down from 10 to 8 units
Chapter6: Business Expenses
Section: Chapter Questions
Problem 71IIP
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Slate was a professional classical guitar player until a motorcycle accident at 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 $700 each, and the fixed monthly operating costs are as follows:
Rent and utilities
Wages and benefits to luthier
Other expenses
$810
$2,500
$480
Slate's accountant told him about contribution margin ration, and Slate understood clearly that for every dollar of sales. $0 50 went to cover his fixed costs, and anything above that
point was profit
Slate is planning to increase the sales price to $820 What impact will the increase in sales price have on the breakeven point in units? (Round your answer up to the nearest
whole guitar)
OA. It will stay the same
OB. It will go up from 8 to 11 units
OC. It will go down from 11 to 8 units
OD. It will go down from 10 to 8 units
acros
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