Ajax was a professional classical guitarist until a motorcycle accident left him disabled. After long months of​ therapy, he hired an experienced luthier and started a small shop to make and sell Spanish guitars. The guitars sell for $700​, and the fixed monthly operating costs are as​ follows:   Rent and utilities $700 Wages and benefits to luthier 2,400 Other expenses 483   ​Ajax's accountant told him about contribution margin​ ratios, and Ajax understood clearly that for every dollar of​ sales, ​$0.70 went to cover his fixed​ costs, and anything above that point was profit.     How many guitars does Ajax need to sell each month to break​ even? (Round your answer up to the nearest whole​ guitar.)   A. 6 guitars   B. 8 guitars   C. 7 guitars   D. 3 guitars

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Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.