Eric Was a Professional Classical Guitar Player Until His Motorcycle

Multiple Choice

Eric was a professional classical guitar player until his motorcycle accident that left him disabled.After long months of therapy,he hired an experienced luthier (maker of stringed instruments) and started a small shop to make and sell Spanish guitars.The guitars sell for $750 and the fixed monthly operating costs are as follows: $$\begin{array} { | l | r | } \hline \text { Rent and utilities } & \$ 1,200 \\\hline \text { Wages and benefits to luthier } & 2,600 \\\hline \text { Other expenses } & 500 \\\hline\end{array}$$ Eric's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales,$0.60 went to cover his fixed costs,and that anything past that point was pure profit.
What is the amount of revenue Eric should earn each month to break even?

A) $10,750
B) $7,167
C) $5,167
D) $6,334