Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars. The guitars sell for 30,000, and the fixed monthly operating costs are as follows: Rent and utilities, 48,000, Wages and benefits of a luthier, 75,000, and Miscellaneous 42,000.

Juan got confused when his accountant told him about contribution margin ratios, but he understood clearly that for every peso of sales, 0.50 went to cover his fixed costs, and that anything past that point was pure profit.

(a) With the favorable market enjoyed by his exquisite craftmanship, Juan is considering increasing his price by 25% to improve the Contribution Margin ratio. Doing so will make the new Contribution Margin ratio ________ %

(b) Increasing the selling price by 25% will bring the new breakeven sales to ______ units. Round UP to a whole number

(c) Increasing the price by 25% brings about a change in the breakeven sales by ______________ units. Indicate in your solution sheet if the units will increase or decrease

(d) Increasing the selling price by 25% will bring the new breakeven sales to ______________ .

please show solutions!