Background Stella Strummer started a company that sells hand-crafted guitars made from carefully curated woods, offering musicians a rich sound that's highly valued. The business - called Strummer - employs a pair of skilled guitar builders, call luthiers. They're paid $350 for each guitar they build (seven hours, $50/hour). Each guitar consists of wood, strings, hardware and adhesive - simple materials, but a complex process. End of Year 1 Selling price = $850 (to the wholesaler) Quantity sold = 577 guitars Total costs: Lease = $36,000 Utilities = $12,600 Insurance = $8,300 Salaries = $131,500 Mktg & sales = $27,200 Wood = $54,815 Strings = $5,770 Hardware = $7,501 Adhesive = $1,154 Mfg labor = $201,950 Break-Even Analysis Stella is pleased with Strummer's Year 1 performance. She wants to further understand how healthy the company is, including how close it came to the break-even point. 2. What were the following numbers for Year 1? (14 points) A. Unit variable cost. B. Unit contribution margin, in $. C. Unit contribution margin, in %. D. Explain the significance of unit contribution margin. (Max one sentence.) E. Break-even volume (units). F. Break-even sales ($). G. By how much - in terms of units and $- did Strummer miss or make a profit? Background Stella Strummer started a company that sells hand-crafted guitars made from carefully curated woods, offering musicians a rich sound that's highly valued. The business - called Strummer - employs a pair of skilled guitar builders, call luthiers. They're paid $350 for each guitar they build (seven hours, $50/hour). Each guitar consists of wood, strings, hardware and adhesive - simple materials, but a complex process. End of Year 1 Selling price = $850 (to the wholesaler) Quantity sold = 577 guitars Total costs: Lease = $36,000 Utilities = $12,600 Insurance = $8,300 Salaries = $131,500 Mktg & sales = $27,200 Wood = $54,815 Strings = $5,770 Hardware = $7,501 Adhesive = $1,154 Mfg labor = $201,950 Break-Even Analysis Stella is pleased with Strummer's Year 1 performance. She wants to further understand how healthy the company is, including how close it came to the break-even point. 2. What were the following numbers for Year 1? (14 points) A. Unit variable cost. B. Unit contribution margin, in $. C. Unit contribution margin, in %. D. Explain the significance of unit contribution margin. (Max one sentence.) E. Break-even volume (units). F. Break-even sales ($). G. By how much - in terms of units and $- did Strummer miss or make a profit