#1. Martin was a professional classical guitar player until a motorcycle accident left him disabled. After long months oftherapy, he hired an experienced luthier and started a small shop to make and sell Spanish guitars. The guitars sell for $900, and the fixed monthly operating costs are asfollows:

Rent and utilities $700

Wages and benefits to luthier 2,300

Other expenses 477

Martin's accountant told him about contribution marginratios, and Martin understood clearly that for every dollar ofsales, $0.65 went to cover his fixedcosts, and anything above that point was profit.

Martin wishes to earn $2,000 of operating profit each month. Calculate the number of guitars Martin will need to sell to achieve the target profit.(Round your answer up to the nearest wholeguitar.)

A. 9 guitars

B. 2 guitars

C. 4 guitars

D. 10 guitars

#2. Harmony Company sells handknit scarves. Each scarf sells for $35. The company pays $70 to rent vending space for one day. The variable costs are $10 per scarf. How many scarves should the company sell each day in order to breakeven? (Round your answer up to the nearest wholescarf.)

A. 35 scarves

B. 7 scarves

C. 3 scarves

D. 2 scarves