1. A product sells for $195, variable costs are $160, and fixed costs are $116,000. If the selling price can be increased by 33% with a similar increase in variable costs, how many fewer units would have to be sold to earn $340,000? (Rounded)

2,798 units.

4,812 units.

435 units.

3,233 units.

2. On July 1, the inventory of at Barnett Shoes was $36,000. Because of anticipated back-to-school sales, the owner wants to have an inventory of $76,000 on hand at the beginning of August. Net sales during July are expected to total $72,000, with a gross profit rate of 40%. During July, the company should purchase merchandise costing:

$43,200.

$119,200.

$83,200.

$76,000.